- 7 -
Congress enacted section 104(b) to curb perceived abuses of
section 104(a)(4).2 Section 104(b)(1) provides that the
exclusion under section 104(a)(4) is restricted to the classes of
individuals described in section 104(b)(2), as follows:
(2) Individuals to whom subsection (a)(4) continues to
apply.--An individual is described in this paragraph if–-
(A) on or before September 24, 1975, he was
entitled to receive any amount described in subsection
(a)(4),
(B) on September 24, 1975, he was a member of any
organization (or reserve component thereof) referred to
in subsection (a)(4) or under a binding written
commitment to become such a member,
(C) he receives an amount described in subsection
(a)(4) by reason of a combat-related injury, or
(D) on application therefor, he would be entitled
to receive disability compensation from the Veterans’
Administration.
For purposes of section 104(b)(2)(C), the term “combat-related
injury” means personal injury or sickness that is: (1) Incurred
as a direct result of armed conflict, while engaged in extra
2The 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 employment while receiving tax-free “disability”
payments from the military. * * * [H. Rept. 94-658, at 152
(1975), 1976-3 C.B. (Vol. 2) 695, 844.]
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011