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Court concluded that: (1) The plain language of 10 U.S.C. sec.
2031(d) does not authorize an exclusion from gross income for
amounts paid to JROTC instructors not on active duty; and (2)
JROTC instructors are employed by the local school district and
are paid for services, partly funded by the Federal Government,
rendered to that school district.
Petitioner received in 1997 his regular retired pay which he
was entitled to whether or not he performed any services. He
received no other compensation or allowances from the Federal
Government. Although it is true that the Federal Government
reimburses school districts for one-half the "additional amount"
paid to retired officers, the ultimate burden of disbursing funds
and establishing compensation scales lies with the employing
school. See 10 U.S.C. sec. 2031(d)(1); Lyle v. Commissioner,
supra at 674; Tucker v. Commissioner, supra. The employing
institution is responsible for issuing compensation checks and
Forms W-2, Wage and Tax Statement, to all of its employees.
Because the Federal Government does not assume any kind of
employer status, no portion of the compensation that petitioner
received as a JROTC instructor could be classified as a
subsistence, quarters, or variable housing allowance from the
Armed Forces. Lyle v. Commissioner, supra at 674. The statutory
provision, in conjunction with the implementing directives issued
by DOD, establishes a formula for computing the minimum
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