Harold L. and Gladys M. Humberson - Page 16

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          System to the Pension System.15  Accordingly, the Transfer Refund           
          received by petitioner does not qualify for forward averaging               
          under section 402(e)(1).  See Hamilton v. Commissioner, T.C.                
          Memo. 1994-633 (addressing whether a taxpayer had received the              
          "balance to the credit" in the context of whether the taxpayer              
          was entitled to compute tax on a transfer refund using the 10-              
          year forward averaging method set forth in section 402(e)(1));              
          Hoppe v. Commissioner, T.C. Memo. 1994-635 (same); Pumphrey v.              
          Commissioner, T.C. Memo. 1995-469 (same); see also Dorsey v.                
          Commissioner, T.C. Memo. 1995-97 (addressing whether a taxpayer             
          had received the "balance to the credit" in the context of                  
          whether a Transfer Refund distribution qualified for tax-free               
          rollover treatment under section 402(a)(5); Brown v.                        
          Commissioner, T.C. Memo. 1995-93 (same); cf. Wheeler v.                     
          Commissioner, T.C. Memo. 1993-561.                                          
               In closing, we note that in a case decided earlier this                
          year, the United States District Court for the District of                  
          Maryland reached the same conclusion in respect of the lump sum             

          15 In view of our conclusion that petitioner did not receive                
          the "balance to the credit" when he transferred from the                    
          Retirement System to the Pension System, we are not required to             
          decide whether the Transfer Refund became payable to petitioner             
          on account of his separation from the service.  We note, however,           
          that we have previously held in other cases, on facts                       
          indistinguishable from those herein, that a transfer refund                 
          distribution is not paid on account of an employee's separation             
          from the service, but rather on account of the employee's                   
          election to transfer from the Retirement System to the Pension              
          System.  Dorsey v. Commissioner, supra; Brown v. Commissioner,              
          supra; Hylton v. Commissioner, T.C. Memo. 1995-27.                          

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