James A. Picard - Page 9

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               This Court has previously considered similar issues in two             
          memorandum opinions, Wiedmaier v. Commissioner, T.C. Memo. 1984-            
          540, affd. 774 F.2d 109 (6th Cir. 1985), and Mabry v.                       
          Commissioner, T.C. Memo. 1985-328.  Both cases involved initial             
          payments to disability retirees conceded to be excludable under             
          section 104(a)(1) that were subsequently recomputed, on the date            
          when the taxpayers would have qualified for service retirement if           
          they had continued work uninterrupted, to substantially                     
          approximate the amount of the service retirement benefit for                
          which the taxpayers would have qualified if they had retired                
          based on years of service on that date.  In both cases the Court            
          concluded that the recomputed payments were ineligible for                  
          exclusion under section 104(a)(1), by virtue of section 1.104-              
          1(b), Income Tax Regs.                                                      
               Wiedmaier involved payments made under the Policemen and               
          Firemen Retirement System incorporated in the Charter of the City           
          of Detroit (Detroit Charter).  Like the Oakland Charter at issue            
          in this case, the Detroit Charter provided an integrated plan of            
          disability and service retirement for members of the city police            
          and fire departments.  The Detroit Charter further resembled the            
          Oakland Charter in three important respects: (i) Members                    
          qualified for service retirement at the time they were retired              
          for disability were accorded retirement benefits computed under             
          the service retirement provisions of the Charter; (ii) members              

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