Otto E. Kuhn and Edna R. Kuhn v. United States

KALODNER, Circuit Judge.

Were payments made to taxpayer by his employer, pursuant to the express provisions of his employment contract, “because of permanent ailment”, tax exempt amounts “received through * * health insurance * * * ” under Section 22(b)(5) of the Internal Revenue Code of 1939 7 1

That is the question presented by this appeal from the judgment of the District Court 2 which answered it negatively, thereby making the payments received taxable as ordinary income rather than compensation for illness exempt from taxation.

The facts as stipulated, supplemented by the oral testimony of…