Ronald J. and Linda Gabriel - Page 15




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               An exception to the above rule exists where the modification           
          is based on a showing "that the original decree did not correctly           
          state the divorce court's determination at the time of its                  
          entry.”  Johnson v. Commissioner, 45 T.C. 530, 533 (1966); see              
          Vargason v. Commissioner, 22 T.C. 100 (1954); Sklar v.                      
          Commissioner, 21 T.C. 349 (1953).  Thus, recognition for Federal            
          tax purposes of certain property rights retroactively conferred             
          at the State or local level is not absolute.                                
               In the case before us, petitioner attempts to apply a city             
          ordinance whose sole purpose was to change retroactively the tax            
          status of the payments received by petitioner.  Notably, section            
          10-12, as amended in 1999, does not permit the payment of                   
          additional pension amounts when a request for retroactive                   
          redesignation is granted.  Thus the distinction drawn by the                
          amended ordinance as between nonoccupational injuries, for which            
          disability payments would be measured by 50 percent of salary,              
          and occupational injuries, for which the measure would be 66-2/3            
          percent, operated with prospective effect only.  Petitioner                 
          received no extra benefits for the years 1992 through 1998 as a             
          result of the city’s recharacterization of his status.                      
               The city council’s intent in providing for the retroactive             
          redesignation of a disability pension is made clear in the                  
          language of the ordinance: to “provide disability retirees with             
          an opportunity to redesignate benefits as occupational disability           






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