Document: 353 U.S. 81 77 S.Ct. 649 1 L.Ed.2d 671 Gordon P. HAYNES and Essie M. Haynes, Petitioners,v.UNITED STATES of America. No. 257. Argued March 5, 1957. Decided April 1, Mr. John H. Hudson, Atlanta, Ga., for the petitioners. Hilbert Zarky, Washington, D.C., respondent. Justice BLACK delivered opinion Court. In 1949, petitioner, became sick unable to work while employed by Southern Bell Telephone Telegraph Company. At that time company had in effect a comprehensive 'Plan Employees' Pensions, Disability Benefits Death Benefits.' This plan been force since 1913 when it was adopted other companies American Company system. A written copy plan, which prepared much like an insurance policy, given every person upon his initial employment company. Among things, provided 'undertakes accordance with these Regulations, provide payment definite amounts its employees they are disabled accident or sickness.' Under employee entitled, after two years' service Bell, receive 'sickness disability benefits' he missed because illness. These payments began on eighth calendar day absence due The amount duration were set out specificity varied length service. For example, who worked from five years entitled full pay four weeks one-half nine additional weeks; more than twenty-five fifty-two weeks. reserved right change terminate but agreed no changes would be made affected 'the rights any employee, without consent, benefit pension may have previously become hereunder.' 2 petitioner paid $2,100 sickness benefits during 1949. Since this equivalent what received working. Government collected $318.44 income tax petitioner's benefits. He brught action refund contending receipts not taxable § 22(b)(5) 1939 Internal Revenue Code exempted 'amounts through health * as compensation personal injuries sickness.'1 District Court held account directed refund. Appeals reversed, accepting Government's contention Bell's 'health insurance' 'wage continuation plan.' 5 Cir., 233 F.2d 413. Epmeier v. United States, 199 508, Seventh Circuit under similar taxable. Because conflict we granted certiorari, 352 820, 60, 46. 3 crucial question is whether should treated within meaning 22(b)(5). Broadly speaking, undertaking one reasons satisfactory him indemnify another losses caused We believe comes insurance. 4 If purchased commercial precisely same kind protection promised own concedes ailing Nevertheless argues fixed periodic premiums, there fund created assure benefits, service.2 do facts remove general category premiums at regular intervals necessary element Similarly necessity aside meet insurer's obligations. And fact increased reflected added value extra experience Apparently relies primarily show did contain features present normal contract. Government, however, offers persuasive reason why term limited particular forms conventionally available companies. Certainly nothing language compels limitation. There support legislative history argument Congress intended restrict exemption 'conventional modes include employer plans. deemed satisfactory, Congress, 1918, has chosen contracts.3 appeared Act 1918 reappeared relevant all succeeding revenue acts up 1954.4 defined committee reports. uniform administrative practice can drawn narrow now urged Government. Administrative rulings appear regularly vacillated between holding plans taxable.5 circumstances see broad meaning. See Helvering Le Gierse, 312 531, 61 646, 85 L.Ed. 996. 6 judgment reversed affirmed. 7 It so ordered. 8 Affirmed. 9 BURTON HARLAN dissent stated Appeals, also, Moholy 235 562; I.R.C., 1954, §§ 104—106, 26 U.S.C.A. accompanying report, H.R.Rep.No. 1337, 83d Cong., 2d Sess. 15, A32 A35. 10 WHITTAKER took part consideration decision case. U.S.C. (1952 ed.) 22(b)(5), points several aspects demonstrating insurance.' After contentions respect find merit. 511, that: 'The provisions Section undoubtedly relieve taxpayer misfortune ill injured, paying combat ravages disease accident.' traced 213(b)(6) 40 Stat. 1066. 104, 105 106 1954 Code, (Supp. III) again However new exclusion those involved here maximum $100 per week. accept enactment 104—106 shows measures, distinguish conventional employer's Bell's. T.D. 2747, 20 Treas.Dec.Int.Rev. 457 (1918); G.C.M. 23511, Cum.Bull. 86 (1943); I.T. 4000, 21 (1950); 4015, 23 4107, 73 (1952); Rev.Rul. 208, 1953—2 102. discussion difficulties Company's system shifting Hearings before House Committee Ways Means Forty Topics Pertaining General Revision 1st 363.

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