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Acknowledging that petitioners’ position is not without force or
appeal, we feel compelled to conclude that any impetus for change
should come from the legislature, rather than this Court.
For these reasons, and adhering to this Court’s reasoning in
Haar and its progeny, we conclude that because Mr. Reimels’s
Social Security disability insurance benefits were not paid as
compensation for military injuries or sickness, they are not
excludable under section 104(a)(4).
F. Petitioners’ Alternate Contentions
1. Section 104(b)(2)
Petitioners make what appear to be alternate contentions on
the basis of the section 104(b)(2) limitations to section
104(a)(4). Essentially, petitioners contend that because Mr.
Reimels meets one or several of the requirements in section
104(b)(2), petitioners are entitled to exclude Mr. Reimels’s
Social Security disability insurance benefits.
Congress enacted section 104(b) to curb perceived abuses.13
13 The relevant legislative history explains the reasons for
the 1976 amendments as follows:
In many cases, armed forces personnel have been
classified as disabled for military service shortly
before they would have become eligible for retirement
principally to obtain the benefits of the special tax
exclusion on the disability portion of their retirement
pay. In most of these cases the individuals, having
retired from the military, earn income from other
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