Ralph P. Waterman - Page 5

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          their service to their country.  Section 112, in pertinent part,            
          provides that "Gross income does not include compensation                   
          received for active service * * * for any month during any part             
          of which such member * * * served in a combat zone".  Section 112           
          and the underlying regulations do not specifically address the              
          question of whether severance pay is excludable.                            
               In construing a statute, we generally give effect to the               
          plain and ordinary meaning of its language.  United States v.               
          Locke, 471 U.S. 84, 93, 95-96 (1985); United States v. American             
          Trucking Associations, 310 U.S. 534, 543 (1940).  Words with a              
          fixed legal or judicially settled meaning, on the other hand,               
          generally must be presumed to have been used in that sense unless           
          such an interpretation would lead to absurd results.  See United            
          States v. Merriam, 263 U.S. 179, 187 (1923); Lenz v.                        
          Commissioner, 101 T.C. 260, 265 (1993).  Our principal objective            
          in interpreting any statute is to determine Congress' intent in             
          using the statutory language being construed.  United States v.             
          American Trucking Associations, supra at 542.  When a statute is            
          ambiguous, we may look to its legislative history and the                   
          purposes for its enactment.  United States v. Ron Pair Enters.,             
          489 U.S. 235, 241 (1989).  With respect to section 112, however,            
          there is a paucity of legislative history or discussion                     
          concerning the legislative intent.  See Bruinooge v. United                 
          States, 213 Ct. Cl. 26, 550 F.2d 624, 627 (1977).                           





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