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If petitioner had not transferred to the Pension System but
rather had remained a member of the Retirement System, he would
have been entitled to retire and receive a normal service
retirement benefit, including a regular monthly annuity. He
would not, however, have been entitled to receive a transfer
refund because a transfer refund is only payable to those who
elect to transfer from the Retirement System to the Pension
System.
As a member of the Pension System, petitioner receives a
retirement benefit based upon his salary and his creditable years
of service, specifically including those years of creditable
service recognized under the Retirement System. However, due to
petitioner's receipt of the Transfer Refund, petitioner's monthly
annuity is less than the monthly annuity he would have received
if he had not transferred to the Pension System but had retired
under the Retirement System.
The Transfer Refund was mailed, in the form of a check, to
T. Rowe Price, a mutual fund in Baltimore, Maryland, and
deposited into an IRA account in petitioner's name in accord with
a Limited Power of Attorney for Bank to Accept Deposit of Refund
Check.
On their Federal income tax return for 1989, petitioners did
not report any part of the Transfer Refund as income. In the
6(...continued)
deficiency, however, this total is shown as $184,787.54.
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