- 20 - provision, petitioners argue that the amount of Social Security disability insurance benefits to be excluded shall not be less than the disability compensation that Mr. Reimels received in 1999 from the Veterans’ Administration. Petitioners contend that because the Social Security disability insurance benefits Mr. Reimels received in 1999 were less than his Veterans’ Administration disability compensation, they are entitled to exclude the entire amount of Social Security disability insurance benefits received. We disagree for the following reasons. First, subsection (b)(4) of section 104, like just-discussed subsection (b)(2), provides no independent basis for exclusion: for petitioners to be eligible for the claimed exclusion, they must meet the requirements of section 104(a)(4). See Grady v. Commissioner, T.C. Memo. 1989-55. We have held that the Social Security disability insurance benefits in question do not meet those requirements. Second, although section 104(b)(4) is not a model of clarity, its legislative history suggests that it was intended to apply with respect to retired military personnel who do not receive the Veterans’ Administration benefits to which they are otherwise entitled. In certain circumstances, section 104(b)(4) provides such persons with a tax benefit at least as great as thePage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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