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retired member by the institution for any period, up to
a maximum of one-half of the difference between the
member’s retired or retainer pay for that period and
the active duty pay and allowances which the member
would have received for that period if on active duty.
Notwithstanding the limitation in the preceding
sentence, the Secretary concerned may pay to the
institution more than one-half of the additional amount
paid to the retired member by the institution if (as
determined by the Secretary) the institution is in an
educationally and economically deprived area and the
Secretary determines that such action is in the
national interest. Payments by the Secretary concerned
under this paragraph shall be made from funds
appropriated for that purpose.
(2) Notwithstanding any other provision of law,
such a retired member is not, while so employed,
considered to be on active duty or inactive duty
training for any purpose.
It has been held that no part of the amount received from a
school district by a retired military officer for services as a
JROTC instructor is excludable from gross income as a housing or
subsistence allowance. Lyle v. Commissioner, 76 T.C. 668, 674-
678 (1981), affd. without published opinion 673 F.2d 1326 (5th
Cir. 1982); Bynam v. Commissioner, T.C. Memo. 2001-142; Tucker v.
Commissioner, T.C. Memo. 1999-373. JROTC instructors are
employed by the educational institutions in which they teach and
not by the Federal Government. 10 U.S.C. sec. 2031(d); Lyle v.
Commissioner, supra at 674; Bynam v. Commissioner, supra; Tucker
v. Commissioner, supra. Accordingly, a JROTC instructor receives
income from the school as compensation for services rendered and
not by reason of that instructor’s status as a member or former
member of the Armed Forces. Lyle v. Commissioner, supra at 674.
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Last modified: May 25, 2011