Millard D. and Marjorie C. Thomas - Page 9

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          absent from work.  See Hines v. Commissioner, 72 T.C. 715, 720              
          (1979).  “Payments from a disability plan do not qualify for the            
          section 105(c)(2) exclusion if the payments are the same                    
          regardless of the nature and severity of the particular injuries            
          causing the disability.”  Hayden v. Commissioner, T.C. Memo.                
          2003-184 (citing Hines v. Commissioner, supra), affd. 127 Fed.              
          Appx. 975 (9th Cir. 2005).  The Court must conclude that the                
          payments to Mr. Thomas fail the first requirement of section                
          105(c)(2) because Mr. Thomas’s disability pension benefits were             
          calculated based on his age and years of employment with Stone              
          Container, and were unaffected by the nature and severity of his            
               PIUMPP disability pension benefits are available only to               
          employees that meet a minimum term of employment. The PIUMPP                
          clearly provides that the amount of disability pension benefits             
          an employee is entitled to receive is based on the employee’s               
          years of employment.  Mr. Thomas’s Notice of Pension Award, and             
          calculations of his benefits, show that his $498 monthly payments           
          were based on his age at the time of his disability and his 25.75           
          years of employment.  Although Mr. Thomas’s disability triggered            
          his entitlement to receive disability pension benefits, the                 
          amount of his monthly benefits was determined by his age and                
          duration of employment, not by the nature and severity of his               

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