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Respondent determined deficiencies in petitioner's Federal
income taxes for the taxable years 1992 and 1993 in the amounts
of $799 and $791, respectively. Respondent also determined
additions to tax pursuant to section 6651(a) in the respective
amounts of $199.75 and $197.75. Petitioner resided in Chicago,
Illinois, at the time she filed her petition.
After concessions,2 the primary issue is whether amounts
received by petitioner as a disability retirement annuity under
the Federal Employees' Retirement System (FERS)3 are excludable
from gross income for the years in issue.
FINDINGS OF FACT
Petitioner worked in a distribution center for the U.S.
Postal Service (Postal Service) from August 1984 to October 1990.
As a result of the inhalation of dust emanating from the postal
machines petitioner developed severe asthma or "occupational
2 Respondent concedes that for the taxable years 1992 and 1993
(1) petitioner is not liable for the additions to tax under sec.
6651(a) due to petitioner's reliance on the erroneous advice of
the U.S. Office of Personnel Management, discussed infra; (2)
petitioner is entitled to credits for the permanently and totally
disabled pursuant to sec. 22 in the amounts of $472 and $463,
respectively; and (3) if the FERS disability retirement annuity
is not subject to Federal income tax, petitioner was not required
to file Federal income tax returns. Petitioner concedes that the
interest and dividends described in the notice of deficiency
constitute taxable income.
3 Congress created the Federal Employees' Retirement System,
the successor to the Civil Service Retirement System, with the
enactment of the Federal Employees' Retirement System Act of
1986, Pub. L. 99-335, 100 Stat. 514, codified as amended at 5
U.S.C. secs. 8401-8479 (1994).
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