If you go back to Section 61, "gross income means all income from whatever source derived."  But in the beginning, there was an exclusion for unemployment.  Then it was replaced by Section 85, which brought at least part of it into gross income.  Then they just threw all of it into gross income.  So why did we need Section 85, anyway?  All we needed was Section 61, except for that confusing history of an exclusion that was partially, and then fully repealed.  I think that's the IRS argument, however feeble you might see it.  

Calling Senator Wyden's office is sort of like calling IRS Taxpayer Service.  You can get different results with the HUCA technique (Hang Up, Call Again).  I had dinner tonight with my son, who worked in a Senator's office, answering constituent phone calls, when he was in his early 20s.  He would go from a question about veteran services, to a question about taxes, to a question about Native American benefits.  Like others in that line of work, he was not a policy specialist.  You would do better to ask someone on the Finance Committee staff, but they generally don't speak to the public.  The truth is out there, though, so keep looking.  I don't see this issue going away.  I just hope it gets resolved before April 15.