- 16 -
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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