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service and a determination of disability. 5 U.S.C. sec.
8451(a)(1)(A) (1994). Disability is defined in 5 U.S.C. sec.
8451(a)(1)(B) (1994), which provides:
For purposes of this subsection, an employee shall be
considered disabled only if the employee is found by the
Office [OPM] to be unable, because of disease or injury, to
render useful and efficient service in the employee's
position.
Under this statute a taxpayer's disability, and thus eligibility
for benefits, depends upon the ability to perform the tasks
required by the employment, not the place of injury.
Petitioner's disability annuity payments were made pursuant to 5
U.S.C. section 8451(a)(1). Because that section does not
distinguish between injuries occurring on the job or elsewhere,
section 104(a)(1) does not exclude the disability annuity
payments received by petitioner from gross income. See Haar v.
Commissioner, supra at 866-868 (holding that similar wording in 5
U.S.C. sec. 8331(6), relating to the Civil Service Retirement
System, did not distinguish between injuries occurring on and off
the job).6
Section 104(a)(2)
Section 104(a)(2) excludes from gross income "the amount of
any damages received (whether by suit or agreement and whether as
lump sums or as periodic payments) on account of personal
6 5 U.S.C. sec. 8331(6) was repealed by the Omnibus Budget
Reconciliation Act of 1980, Pub. L. 96-499, tit. IV, sec. 403(b),
94 Stat. 2606. Cf. 5 U.S.C. sec. 8337 (1994).
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