- 10 - Administration. Otherwise, future members of the armed forces will be allowed to exclude military disability retirement payments from their gross income only if the payments are directly related to "combat injuries." Tax Reform Act of 1976, S. Rept. 94-938, at 139, 1976-3 C.B. (Vol. 3) 49, 177. Contrary to petitioner's argument, that report supports the interpretation of the statute applied in Haar--that disability payments may be excluded if the pension plan, whether civilian or military, compensates for military injuries. The payments at issue here, as in Haar, are based upon a civilian pension received by the employee for his inability to do the required work, regardless of whether such inability, as pointed out in Haar v. Commissioner, 78 T.C. at 867, "arose from military service." Moreover, the report makes clear that Congress was attempting to prevent abuse of the exclusion by military retirees who qualified for disability just before retirement and then engaged in full-time civil employment while receiving an excludable "disability" paycheck. S. Rept. 94-938, supra at 138, 1976-3 C.B. (Vol. 3) at 176. To allow petitioner to exclude from income disability payments received from a civilian source, thus in effect setting the stage for being compensated twice for the same injury, would run counter to the Congressional purpose explicitly stated in the committee report upon which petitioner relies.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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