- 3 - 1995, petitioners decreased their gross income by $99,434, stating their reason as follows: IN JULY, 1993, TAXPAYERS WERE INFORMED THAT $99,434.30 OF GROSS WAGES ORIGINALLY REPORTED IN 1992 WOULD BE RECLASSIFIED FROM SEVERANCE PAY TO DISABILITY PAY. 1992 GROSS WAGES, WHICH ORIGINALLY INCLUDED THIS AMOUNT, SHOULD BE REDUCED BY THIS NON TAXABLE DISABILITY INCOME. Petitioner argues that, when the Department of Veterans Affairs determined he was entitled to disability compensation, the lump- sum distribution received from the voluntary incentive program was reclassified as disability pay and, thus, was not includable in gross income pursuant to section 104(a)(4). The Special Separation Benefits Program, 10 U.S.C. sec. 1174a (Supp. IV 1992), in which petitioner participated was enacted by Pub. L. 102-190, title VI, sec. 661(a)(1), 105 Stat. 1394 (1991). Its purpose was to “give a reasonable, fair choice to personnel who would otherwise have no option but to face selection for involuntary separation” due to military strength reductions. H. Conf. Rept. 102-311, at 556 (1991), 1991 U.S.C.C.A.N. 1042, 1111-1113. While 10 U.S.C. sec. 1174a does not address the effect of Department of Veterans Affairs disability payments on separation benefits, 10 U.S.C. sec. 1174(h)(2) (Supp. IV 1992) (the recoupment statute) applies to the Special Separation Benefits Program. 10 U.S.C. sec. 1174a(g) (Supp. IV 1992). The recoupment statute provides:Page: Previous 1 2 3 4 5 6 Next
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