Green v. Commissioner, Docket No. 8162-93.
| Decision Date | 09 June 1994 |
| Docket Number | Docket No. 8162-93.,Docket No. 21166-93. |
| Citation | 67 T.C.M. 3074 |
| Parties | Laurence R. and Arline P. Green v. Commissioner. Joseph E. and Judith T. Gentle v. Commissioner. |
| Court | U.S. Tax Court |
Jonathan J. Klein and Samuel L. Braunstein, 965 White Plains Rd., Trumbull, Conn., for the petitioners. Carmino J. Santaniello, for the respondent.
Memorandum Findings of Fact and Opinion
This is the lead case in respondent's Heart and Hypertension Benefits Litigation Project.1 Petitioners herein — Laurence R. and Arline P. Green, and Joseph E. and Judith T. Gentle — petitioned the Court for redetermination of respondent's determinations reflected in notices of deficiency issued on March 10, 1993 (to the Greens), and August 30, 1993 (to the Gentles). The Court ordered these two cases consolidated for purposes of trial, briefing, and opinion.
Respondent's notices of deficiency listed the following deficiencies in Federal income taxes:
Laurence R. and
Arline P. Green: 1989 ............... $ 3,910
1990 ............... 4,435
Joseph E. and
Judith T. Gentle: 1990 ............... 15,390
Following a concession by respondent, the sole issue for decision is whether the payments received by Laurence R. Green and Joseph E. Gentle under Conn. Gen. Stat. Ann. section 7-433c (West 1989), are excludable from gross income under section 104(a)(1). The answer depends on whether these payments were received "under a statute in the nature of a workmen's compensation act which provides compensation to employees for personal injuries or sickness incurred in the course of employment."2 See sec. 1.104-1(b), Income Tax Regs. As discussed herein, we hold that these payments were not received under such a statute.
Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the taxable years in issue.3 Rule references are to the Tax Court Rules of Practice and Procedure. Conn. Gen. Stat. Ann. sec. 7-433c (West 1989), is referred to as the Connecticut Heart and Hypertension Statute. Payments received under the Connecticut Heart and Hypertension Statute are referred to as section 7-433c payments. The term "petitioners" refers collectively to Laurence R. Green and Joseph E. Gentle.
Some of the facts have been stipulated and are so found. The stipulations and attached exhibits are incorporated herein by this reference. Each petitioner resided in Connecticut at the time that he or she filed a petition in this case. For the taxable years in issue, each petitioner filed a Form 1040, U.S. Individual Income Tax Return, using the filing status of "Married filing joint return".
On September 1, 1963, petitioner Laurence R. Green (Green) began working as a firefighter for the City of Torrington, Connecticut (Torrington). Green underwent a mandatory physical examination on entry into this service; the examination did not detect any evidence of heart disease or hypertension. In 1974 and 1977, Green was diagnosed with hypertension and coronary artery disease, respectively. On October 16, 1979, Green suffered a heart attack that prevented him from continuing his work as a firefighter.
In 1979, Green filed a claim for section 7-433c payments. On January 9, 1980, Torrington placed Green on a full medical pension, effective January 13, 1980, and Green retired as a member of the Torrington Fire Department on this latter date. Since January 13, 1980, Green's medical pension has provided monthly payments of $603.32; the municipal ordinance under which Green received these payments entitled him to an annual pension equal to 50 percent of his annual compensation on the date of his retirement.
In addition to the monthly pension payments under the municipal ordinance, Green began receiving section 7-433c payments in 1980. With respect to the years in issue, Green received section 7-433c payments as follows:
1989 1990
Firefighters' salary at
that time ............. $26,042.841 $29,553.841
Less: Monthly
pension ............... 7,239.842 7,239.842
__________ __________
Section 7-433c
payments .............. $18,803.00 $22,314.00
========== ==========
1 Amount of compensation paid in those years to
members of the Torrington Fire Department that held
the same position that Green held on the date of his
retirement
2 $603.32 per month × 12 months = $7,239.84
Green included neither the monthly pension nor the section 7-433c payments in his 1989 or 1990 gross income. Respondent determined that Green should have included both of these payments in his income for those years. Respondent later conceded that the monthly pension was not taxable to Green.
On January 15, 1969, petitioner Joseph E. Gentle (Gentle) began working as a police officer for the City of Stamford, Connecticut (Stamford). Gentle underwent a mandatory physical examination on entry into this service; the examination did not detect any evidence of heart disease or hypertension.
Gentle was diagnosed with high blood pressure in 1977. Gentle later suffered a minor stroke caused by a blood clot on December 5, 1979, that caused him to miss approximately 6 weeks of work. Upon returning to work, on January 16, 1980, Gentle was assigned to light duty in the Stamford Police Department's record room. Approximately 6 months later, Gentle was reassigned to street duty, and, shortly thereafter, reassigned to the night shift as a "jailer".4 Gentle's duties as a "jailer" consisted of booking suspects and monitoring those suspects who were in custody.
Gentle filed a claim for section 7-433c payments in 1980. During the year in issue, Gentle received section 7-433c payments totaling $49,520.10. Gentle also received $60,484 in wages from Stamford, and earned $22,984 in self-employment income by directing traffic on behalf of third parties.
Gentle did not include in his 1990 gross income any portion of the section 7-433c payments received during that year. Respondent determined that Gentle should have included the section 7-433c payments in his income for that year.
The Connecticut Workmen's Compensation Commission (Commission) administers all claims filed under either the Connecticut Workmen's Compensation Act (Act) or the Connecticut Heart and Hypertension Statute. All amounts payable to a claimant under the Act are available to a claimant under the Connecticut Heart and Hypertension Statute. Police officers and firefighters who suffer from heart disease and/or hypertension may sequentially or simultaneously file claims for benefits under the Act and the Connecticut Heart and Hypertension Statute.
The administrative procedures are generally the same for filings under the Act and filings under the Connecticut Heart and Hypertension Statute. Employees initiate claims for benefits under each of these provisions by filing a notice of injury with the Commission and the claimant's employer. The employee and employer then agree or disagree that the employee is entitled to benefits. If the employer disagrees with the employee, an informal hearing to resolve the disagreement is scheduled before the Commission. In the event that this informal hearing fails to resolve the disagreement, a Commissioner of the Commission holds a formal evidentiary hearing. That Commissioner then issues a written opinion in which he or she upholds or denies the employee's claim for benefits.
A claimant is not required to establish a causal connection between his or her employment and his or her heart disease or hypertension, in order to recover section 7-433 payments. An award of section 7-433c payments is made if a claimant establishes by a preponderance of the evidence that he or she: (1) Is a uniformed member of a paid municipal fire department or a regular member of a paid municipal police department; (2) underwent a physical at the time of commencing employment which did not disclose any evidence of heart disease or hypertension;5 and (3) developed (either on duty or off duty) heart disease or hypertension resulting in disability. Employers may contest a claimant's allegation that he or she has met these three prongs.6
OpinionThe Connecticut General Assembly has chosen to provide special compensation to, and in recognition of, the men and women who serve in the police and fire forces of its State. See the preamble to the Connecticut Heart and Hypertension Statute;7 see also Grover v. Town of Manchester, 357 A.2d 922, 924 (Conn. 1975). We agree with the Connecticut General Assembly that police officers and firefighters are vital to our society. We are mindful of the gratitude that society owes to police officers and firefighters who confront considerable peril and frequent risks to protect the safety of the public. Courts, however, are not legislators who can recognize valuable service with largess. We cannot write or rewrite the law to accomplish the objectives of pleasing this group or that. Rather we must be cognizant that our duty is to interpret the law as written by the legislators, and to apply this law in an evenhanded manner regardless of the quality or characterization that otherwise attaches to the facts of a particular case.
The question for our decision is whether the payments that Green and Gentle received pursuant to the Connecticut statute during the years in issue are excluded from their gross income by section 104(a)(1), which provides that gross income does not include "amounts received under workmen's compensation acts as compensation for personal injuries or sickness". Exclusions from gross income are construed narrowly to effectuate the Congress' general intent to tax any accession to wealth. United States v. Centennial Sav. Bank FSB [91-1 USTC ¶ 50,188], 499 U.S. 573, 583-584 (1991); Commissioner...
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