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Petitioners argue that the Social Security disability
insurance benefits Mr. Reimels received in 1999 are excludable
under section 104(b)(2)(C) because they are part of a disability
pension for his combat-related injury resulting from his exposure
to Agent Orange. Petitioners also argue that the Social Security
disability insurance benefits are excludable under section
104(b)(2)(D) because Mr. Reimels is entitled to receive
disability compensation from the Veterans’ Administration. We
disagree.
Section 104(b)(2) provides no independent basis for
exclusion. Instead, consistent with express legislative intent,
it limits the classes of persons who otherwise might be eligible
for the section 104(a)(4) exclusion. Thus, regardless of whether
Mr. Reimels’s disability arose from combat-related injuries while
he was serving in the U.S. Armed Forces, the payments in question
must meet the requirements for exclusion under section 104(a)(4).
For the reasons discussed above, Mr. Reimels’s Social Security
disability insurance benefits do not meet those requirements.15
14(...continued)
amounts taken into account under subsection (a)(4) shall be the
amounts which he receives by reason of a combat-related injury.”
15 Moreover, as previously discussed, the fact that Mr.
Reimels received disability compensation from the Veterans’
Administration does not distinguish Haar v. Commissioner, 78 T.C.
864 (1982), and does not entitle Mr. Reimels to an exclusion
under sec. 104(a)(4). See Kiourtsis v. Commissioner, T.C. Memo.
1996-534.
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