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* * * * * * *
Congress could have enacted a law which would have
allowed the immediate exclusion of readjustment
payments from taxation * * *. However, Congress did
not choose to have the lump-sum readjustment payments
treated in this manner. Congress deliberately
determined that a veteran covered by 10 U.S.C. sec.
687(b)(6) would be permitted to receive Veterans'
Administration disability compensation upon restoring
to the Government that 75-percent portion of the
readjustment payment * * *. [Id. at 693-694.]
The repealed section 687 of title 10 would appear to be the
lineal ancestor of 10 U.S.C. sec. 1174. While 10 U.S.C. sec.
1174(h)(2) mandates a 100-percent recovery of the SSB payment
before petitioner would receive the DVA disability compensation,
in substance the two provisions are the same. Congress could
have provided that the SSB payment received under 10 U.S.C. sec.
1174(c) was nontaxable to the extent it was subject to recoupment
under 10 U.S.C. sec. 1174(h)(2). We have searched the statutory
language and the legislative history of 10 U.S.C. sec. 1174 and
find no indication that Congress intended that an SSB payment
would be tax exempt under these circumstances. See H. Rept. 96-
1462 (1980). In sum, Congress did not provide for such an
exemption, and we cannot infer one. See Palm v. United States,
904 F. Supp. 1312 (M.D. Ala. 1995).3
3 Contrary to petitioners' argument, Strickland v.
Commissioner, 540 F.2d 1196 (4th Cir. 1976), is inapposite. That
case concerned the tax treatment of retirement pay and the
retroactive granting of increased disability compensation.
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