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from the facts of the cases at hand, combined to persuade the
District Court in Dominion Resources that the refunds were more
like deductible expenses than future rate reductions.
Our holding is also consistent with our prior opinion in
Andrews v. Commissioner, T.C. Memo. 1992-668. In Andrews, a
taxpayer, injured while on the job, received excess disability
payments from Met Life, her insurance carrier, while she was
involved in a legal action with the Social Security
Administration to receive benefits. The payments were made
subject to the condition that, if the taxpayer won her dispute
and was awarded funds for past Social Security benefits, the
taxpayer would refund the excess disability payments to the
insurance company. The taxpayer won her legal action and
satisfied her refund obligation by setting off her liability to
Met Life against future ordinary disability payments to which she
was entitled from Met Life. This Court denied section 1341
relief, stating that the taxpayer’s return of funds by means of a
setoff would not qualify as a deduction because:
there has been no “restoration”, i.e., nothing has been
repaid to Met Life by Mrs. Andrews. We reject the
contention that, under these facts, there can be a
constructive restoration when no actual repayment is
made.
In 1987, Mrs. Andrews received all the Social
Security payments to which she had been entitled for
the years 1983 through 1986. At that point, Met Life
had paid Mrs. Andrews more than it was obligated to
pay, and reduced its payments to her in subsequent
years until it had setoff its obligation to
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