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worker's compensation for purposes of section 104(a)(1). See
Rutter v. Commissioner, supra; Green v. Commissioner, supra;
Curmon v. Commissioner, supra.
In Mabry v. Commissioner, T.C. Memo. 1985-328, and Wiedmaier
v. Commissioner, T.C. Memo. 1984-540, affd. 774 F.2d 109 (6th
Cir. 1985), the taxpayers initially received disability payments
but were later transferred to a general service pension computed
on the basis of the number of years of service. We held that the
benefits became taxable when each taxpayer was transferred to a
general pension. Petitioner did not initially receive 66-2/3-
percent disability pension payments, and so this situation is, if
anything, stronger for respondent than that in Mabry v.
Commissioner, supra, or Wiedmaier v. Commissioner, supra.
In Picard v. Commissioner, ___ F.3d ___ (9th Cir., Jan. 26,
1999), revg. T.C. Memo. 1997-320, the U.S. Court of Appeals for
the Ninth Circuit held that pension benefits paid to a disabled
worker remained excludable under section 104 where the pension
was reduced, but the taxpayer was not transferred from a
disability pension to a general pension. We need not consider
the holding of the Court of Appeals in Picard because
petitioner's pension benefit was paid under the general pension
provisions of the Pawtucket City Code.
Petitioner contends that we should treat his payments as if
they were in lieu of worker's compensation because on June 22,
1995, the Pawtucket City Council amended the ordinance to state
that disability benefits are in lieu of worker's compensation.
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