Rev. Rul. 72-291

Advice has been requested whether a pension received by a widow of a volunteer fireman who was killed in the line of duty is excludable from gross income under the provisions of section 104(a)(1) of the Internal Revenue Code of 1954.

The taxpayer is the widow of a volunteer fireman who was killed while performing his duties as a fireman. The city by resolution of its council, granted the taxpayer an annual pension for life or until she remarries.

A statute of the state provides that the governing body of any municipality served by a volunteer fire company may, by ordinance or resolution, provide for the payment of a pension to the widow or minor children of a volunteer fireman who has died as the result of injuries sustained in the course of performance of duty as a member of the volunteer fire company.

The municipality, in the instant case, passed an ordinance that required a pension be paid to the widow of any volunteer fireman who died as a result of injuries sustained in the performance of duty as a member of the volunteer fire department.

Section 104(a)(1) of the Code provides, in pertinent part and with certain exceptions not here pertinent, 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 Income Tax Regulations states 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. Section 104(a)(1) of the Code also applies to compensation which is paid under a workmen's compensation act to the survivor or survivors of a deceased employee.

Revenue Ruling 68-10, C.B. 1968-1, 50, holds that the total payments made by a California county to an employee under the California Labor Code, because of an occupational injury or illness arising out of and in the course of the employee's duties are in the nature of and in lieu of workmen's compensation, and such payments are excludable from the employee's gross income under section 104(a)(1) of the Code. See also Revenue Ruling 72-44, page 31, which discusses the treatment of amounts received under various circumstances by disabled firemen from the Firemen's Pension and Relief Fund for the City of New Orleans.

The municipal ordinance in the instant case is comparable to the statutes and ordinances that have been held to be workmen's compensation acts or in the nature of workmen's compensation acts because they make payments for service-incurred disability. The fact that the pension is to be paid to the fireman's widow does not adversely affect the comparison since widow's benefits are a common part of many workmen's compensation acts.

Accordingly, it is held in the instant case that the total payments received by the widow of a volunteer fireman who was killed in the line of duty are in the nature of and in lieu of workmen's compensation, and such payments are excludable from the widow's gross income under section 104(a)(1) of the Code.