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The issue before us is whether the pay that petitioner
received as a JROTC instructor included (or should be deemed to
include) nontaxable military allowances, or whether such pay (in
its entirety) was nothing other than an amount received as
compensation for services rendered.
Petitioner contends that a portion ($17,073) of his JROTC
pay represents “qualified military benefits” that are excludable
from gross income pursuant to 10 U.S.C. sec. 2031(d) and section
134 of the Internal Revenue Code. We disagree.
Petitioner relies heavily on the statute and the DOD
directive providing that the total compensation received by a
retiree-instructor is equal to the difference between retired pay
and active duty pay plus “allowances” that the retiree-instructor
would receive if ordered to active duty. In this regard,
petitioner proposes that the statute and the DOD directive
establish “equitable parity” in the compensation of retired and
active duty instructors. Petitioner then argues for an exclusion
from income equal to the sum of the allowances received by active
duty members of the same rank; otherwise, in petitioner’s view,
the disposable income that he would receive as a JROTC instructor
would be less than that of an active duty officer performing
identical services. However, petitioner’s contention is flawed
in several fundamental respects.
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