Rev. Rul. 83-77

1983-1 C.B. 37.

                       Internal Revenue Service
                                 Revenue Ruling

                         POLICE OFFICERS; NEW YORK CITY

                             Published: May 9, 1983

SECTION 104. - -COMPENSATION FOR INJURIES OR SICKNESS, 26 CFR 1.104-1: Compensation for injuries or sickness

(Also Section 61; 1.61-2.)

  Police officers; New York City.  A disabled police officer employed by the City of New York may not exclude from gross income under section 104(a)(1) of the Code any payments received under the terms of a union contract between the City and the Patrolmen's Benevolent Association.

ISSUE

  Are payments made to a disabled police officer by the City of New York excludable from gross income under section 104(a)(1) of the Internal Revenue Code under the circumstances described below?

FACTS

  A, a police officer employed by the City of New York, was injured in the line of duty on February 1, 1980.  After examination by the proper medical authorities, A was determined to be unable to perform regular police duties as a result of the injury and was ordered to remain off duty indefinitely.  Under the terms of a union contract negotiated between the City and a Policemen's Association, A was entitled to leave with pay for the full period of any incapacity due to any illness, injury, or mental or physical defect, whether or not incurred in the line of duty.  The contract is consistent with section 434(a)-14.0, subdivision c of the Administrative Code of the City of New York, which permits payment of salary while a police officer is absent because of sickness or injury, whether or not service connected.

LAW AND ANALYSIS

  Section 61(a) of the Code and the Income Tax Regulations provide that, except as otherwise provided by law, gross income means all income from whatever source derived, including compensation for services.

  Section 104(a)(1) of the Code provides, with certain exceptions not pertinent here, that gross income does not include amounts received under workmen's compensation acts as compensation for personal injuries or sickness.

  Section 1.104-1(b) of the regulations provides that section 104(a)(1) of the Code excludes from gross income amounts received by an employee under a workmen's compensation act or under a statute in the nature of a workmen's compensation act that provides compensation to the employee for personal injuries or sickness incurred in the course of employment.

  The benefits received by A are provided by the union contract negotiated with the City of New York.  The union contract does not qualify as a statute.  If it were a statute, it would not be a statute in the nature of a workmen's compensation act because it provides for payment while the employee is absent from work due to any illness or injury, whether or not incurred in the line of duty.  The City's administrative code sick-pay provision, although a statute, is not in the nature of a workmen's compensation act because it provides for payment while the employee is absent from work due to any illness or injury, whether or not incurred in the line of duty.  A statute is not in the nature of a workmen's compensation act unless it limits benefits to instances of work- related disability.  See Rev. Rul. 80-84, 1980-1 C.B. 35. Therefore, the payments do not come within the scope of section 104(a)(1) of the Code and the regulations.

HOLDING

  A may not exclude from gross income under section 104(a)(1) of the Code any payments received from the City of New York under the City's union contract with the Patrolmen's Benevolent Association of the City of New York.

Rev. Rul. 83-77, 1983-1 C.B. 37.