- 6 - Use of the word "for" in the section 112(a)(1) language "compensation received for active service * * * in a combat zone" requires that the compensation be earned for a person's service in a combat zone. This statutory language is not ambiguous concerning the subject of when and how the compensation must be earned. As to when the payment is received, the underlying regulation contains the following pertinent language: The time and place of payment are irrelevant in considering whether compensation is excludable under section 112; rather, the time and place of the entitlement to compensation determine whether the compensation is excludable under section 112. * * * For this purpose, entitlement to compensation fully accrues upon the completion of all actions required of the member to receive the compensation. * * * [Sec. 1.112-1(b)(4), Income Tax Regs.3] The above-quoted language also addresses the question of when the compensation is earned. The regulation does not, however, address how the compensation is to be earned in order to be excludable under section 112; i.e., for military service performed in a combat zone or any type of service or act that is performed or may occur in a combat zone. Congress provided a specific exception from the type of compensation that may be excludable under section 112; to wit, pensions and retirement pay. Sec. 112(c)(4). Respondent does 3On Aug. 19, 1993, these regulations were retroactively amended under authority of sec. 7805 to be effective Jan. 16, 1991. T.D. 8489, 1993-2 C.B. 65.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011