- 13 -
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
distribution issue that this Court has reached. Sites v. United
States, 75 AFTR 2d 95-2504, 95-1 USTC par. 50,280 (D. Md. 1995).
The final paragraph of the District Court's analysis deserves to
be quoted as follows:
The Court believes that the statutory analysis and
reasoning of Hoppe [v. Commissioner, T.C. Memo. 1994-
635] is sound. Because the Retirement System and
Pension System were both maintained by Taxpayer's
employer, the State of Maryland, they are to be
aggregated for purposes of determining the "balance to
the credit" of an employee under section 402(e)(4)(A).
Whereas Taxpayer received a refund of his contributions
and the accumulated interest, his service credits were
transferred to and remained within the Pension System.
By choosing to transfer to the Pension System, * * *
[Taxpayer] opted * * * to receive a refund of his
contributions and accumulated interest along with
reduced annuity payments in the future. Thus, in
effect, Taxpayer elected to receive the "balance to the
credit" of his account in two-parts: the refund payment
and the future annuity payments. Consequently, he did
not receive the "balance to the credit" of his account
on * * * [the Transfer Refund date]. Id. [75 AFTR 2d
95-2504, at 95-2507, 95-1 USTC par. 50,280, at 88,031].
In order to give effect to our disposition of the disputed
issue, the parties' concessions, and the parties' stipulation
referenced in supra notes 4 and 7,10
10 It would appear that such stipulation would also affect
the amount of the excise tax under sec. 4980A. We leave this
matter to the parties as part of the Rule 155 computation.
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