George Kiourtsis - Page 7

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            Administration (GSA), and was finally retired from GSA on                                     
            disability because of his hearing disability.  He sought to                                   
            exclude from gross income annuity payments thereafter received                                
            from the Civil Service Retirement and Disability Fund.  He                                    
            contended that the Civil Service disability amount should be                                  
            excluded from gross income, regardless of whether the retirement                              
            plan was a military one, so long as the disability pension was                                
            paid for an injury incurred during active service.  Id. at 866.                               
            This Court held otherwise, focusing instead on the provisions of                              
            the retirement plan:                                                                          
                  No case has previously considered whether section                                       
                  104(a)(4) can be applied to exclude from income                                         
                  payments made to persons who retire from nonmilitary                                    
                  employment.  Although the ambiguous wording of section                                  
                  104(a)(4) provides some superficial support for                                         
                  petitioner's position, this is overshadowed by the fact                                 
                  that the Civil Service Retirement Act * * * is not                                      
                  designed to provide compensation for military injuries.                                 
                  5 U.S.C. sec. 8331(6) defines "disability" to mean the                                  
                  total disability for useful and efficient service in                                    
                  the grade or class of position last occupied by the                                     
                  employee, because of disease or injury.  Under this                                     
                  provision, the nature or cause of the disability is                                     
                  irrelevant; all that is taken into consideration is the                                 
                  employee's ability to perform his or her job.  Thus, in                                 
                  determining eligibility for disability retirement and                                   
                  the amount of disability annuity payments, no                                           
                  consideration is given to whether the disease or injury                                 
                  arose from military service.                                                            

            Id. at 866-867 (emphasis added); accord French v. Commissioner,                               
            T.C. Memo. 1991-417; cf. Lonestar v. Commissioner, T.C. Memo.                                 

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