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taxpayer, a Maryland public school teacher, elected to transfer
from the Retirement System to the Pension System, effective
January 1, 1990, and received thereafter a Transfer Refund. In
May 1990, the taxpayer applied for retirement and retired in
fact, effective July 1, 1990. Hylton concluded as follows:
Petitioners have shown that petitioner's election
to transfer to the Pension System, due to which
election he received the Transfer Refund, was related
to his retirement planning. In other words, they have
demonstrated that the decision to retire was a "link in
the chain of causalities" leading to the receipt of the
Transfer Refund. [Citation omitted.] However, we view
petitioner's separation from service as no more than a
"mere link in the chain of causalities" leading to the
receipt of the Transfer Refund. [Citation omitted.]
Accordingly, we hold that petitioner did not
receive the Transfer Refund on account of his
retirement. Rather, he received the Transfer Refund
because of his election to transfer from the Retirement
System to the Pension System, an election that, under
Maryland law, lacked the requisite connection to
petitioner's separation from service.
In reaching the foregoing conclusion, we relied heavily on
Gunnison v. Commissioner, 54 T.C. 1766 (1970), affd. 461 F.2d 496
(7th Cir. 1972), where we considered the meaning of the phrase
"on account of" in an earlier version of the operative statute
and construed it narrowly. Id. at 1773.
Hylton was never appealed, and the decision in that case
became final on April 25, 1995. See sec. 7481(a)(1), 7483; cf.
Fed. R. App. P. 13(a).
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