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spent on disability as equivalent to time spent working for this
purpose. Pursuant to the terms of section 2610(a) of the
Charter, the taxpayer's disability retirement allowance was then
recomputed as if he had taken service retirement on September 27,
1960. As a result, his payments were reduced from 75 percent to
50 percent of 1-year average compensation.
In Mabry, we interpreted section 1.104-1(b), Income Tax
Regs., as follows:
In conformity with * * * [section 1.104-1(b), Income
Tax Regs.], we and other courts have consistently held that,
in order to be excludable under the provisions of section
104(a)(1), retirement pensions or payments may not be based
upon any factor other than disability and, where payments
are based upon any other factor, such as age or length of
service on the job, the retirement plan in question will not
qualify as similar to workmen's compensation acts within the
meaning of section 104. [Citations omitted.]
Relying on Wiedmaier v. Commissioner, T.C. Memo. 1984-540, we
concluded in Mabry v. Commissioner, T.C. Memo. 1985-328, that the
recomputed payments were not excludable under section 104(a)(1),
based on section 1.104-1(b), Income Tax Regs., reasoning that
8(...continued)
qualified for service retirement" had such member rendered
service without interruption. The version of sec. 2610(a) of the
Charter applicable in Mabry v. Commissioner, T.C. Memo. 1985-328,
required the recomputation when the member (merely) "would have
qualified for service retirement". Consequently, since a member
could qualify for service retirement either with 25 years of
service or with 20 years if he had attained age 55, the Mabry
version of sec. 2610(a) of the Charter resulted in a
recomputation at the 22-year mark when the taxpayer turned 55.
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