T.C. Sum m ary Opi ni on 20 15 -7 2

UNITED STAT ES TAX COURT DALE MARTIN SANA, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 29 24 6- 13 S. Fi le d Dec em be r 2, 2 01 5.
Dale Mart in San a, pr o s e. Ro be rt M . Rom as hk o, fo r res po nd en t.

SUMM ARY OPINION GUY, Spec ia l Tri al Ju dg e: Thi s ca se was h eardpu rs uantto th e p ro vi si on s of sec ti on 74 63 of t he Int ern al Rev enue Co de ineffe ctwhenth e p et it io n was fil ed . Pur su an t t o s ect io n 7 46 3( b) , th e d eci si on to be en te redis no t re vi ewab le by 1
Unl es s o th erwi se in di cat ed , sec ti on refe ren ces are t o the Int ern al Rev enue 1 (co nt in ue d...)-2 -

an y othe r co urt, an d thi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y othe r cas e. Res po nd en t d et erm in eda de fic ie nc y of $ 3,5 85 inpe ti ti on er’s Fed eral in co m e ta x fo r 20 11 . Peti ti on er fi le d ati m el y pe ti ti on forred et erm in at io n wi th th e Co urt p ur su an t t o s ect io n 6 21 3( a). At the ti m e th e p et it io n was fil ed , pet it io ne r res id edinIll in oi s. The so le is su e fo r de ci si on is whet he r pe ti ti on er m ay ex cl ud e fro m

gro ss in co m e $ 13 ,50 5 o f ret ire m en t p ay th athe rece iv edfro m

th e Defen se Fin an ce an d Acco un ti ng Serv ic e (DFAS) i n 2 01 1. To th e ex te ntno t d is cu ss edhe rei n, o th er is su es are co m

pu ta ti on al an d fl ow fr om our de ci si on inth is cas e. Bac kg ro un d So m e o f th e fac ts ha ve be enst ip ul at edan d a re s o fo un d. Th e st ip ul at io n o f fact s an d the acco m

pa nyin g e xh ib it s ar e in co rp or at edhe rei n b y th is refe ren ce. I. Pet it io ne r’s Mi li tary

Serv ic e an d Di sabi li ty Reti rem en t Pet it io ne r at te nd edLewis Uni ve rs ity wher e h e rec ei ve d aba ch el or ’s deg ree in av ia ti on m ai nt en an ce an d m an ag em en t i n 1 98 5. Inth e fal l o f 19 85 pe ti ti on er (...co nt inue d) 1 Co de , as a m en de d a ndineffe ctfor20 11 , andRu le refe ren ces are t o the Tax C ou rt Ru le s o f Prac ti ce an d P ro cedur e. Mo ne tary am ount s ar e ro un de d t o the ne ares t do ll ar.-3 -

en li st edinth e U.S. Navy, andhe was c omm is si on edas a n o ffi cer i n M arch 19 86 . Afte r rec ei vi ng pri m ary fli gh t trai ni ng inCo rp us Ch ris ti , Texa s, h e was tra ns ferr ed to Pen sa co la , Flo rid a, fo r he li co pt er fl ig httra in in g. InJu ne 19 87 pe ti ti on er s uf fere d aser io us in

jury to h is lef

t kne e in a wate rs ki in g a cci de nt . Over the y ears th atfol lo wedhe ha d n um ero us su rg eri es to rep ai r da m ag edbo ne , nerve s, an d l ig am en ts an d re cei ve d e xt en si ve ph y si cal th erap y an d re habi li ta ti ontre atm en t. Effect iv e Ju ne 15 , 19 91 , th e Nav y di sc ha rg edpe ti ti on er fro m act iv e dut y , pl acedhi m

on it s t em

po rary dis ab il ity

ret ire m en t l is t, an d a ss ig ne d h im a 40 % di sabi li ty rati ng . Peti ti on er wo rk edas aco ns tru ct io n l ab or er wh il e h e was on th e Nav y ’s tem

po rary dis ab il ity

ret ire m en t l is t. InFeb ru ary 19 93 th e Nav y ’s Physic al Exam in at io n B oa rdde te rm in edth at pe ti ti on er’s d is ab li ng co nd it io n m ad e h im un fitforfurth er dut y , th athe was 3 0% di sabl ed , andth athe wou ldbe pe rm an en tl y ret ire d i n a cco rd an ce wi thth e pr ov is io ns of 1 0 U.S.C. s ec. 1 21 0 (2 01 2) . There aft er, p et it io ne r rec ei ve d m on th ly ret ire m en t p ay

equa l t o h is ba se pa y

m ul ti pl ie d b y

hi s d is ab il ity

rat in g o f 30 %. See i d. s ec. 1 40 1. Pet it io ne r te st ifi edth athe co nt in ue d t o h av e kne e p ai n a fte r ret iri ng fro m th e Nav y an d tha t h e ev en tu al ly elect edto ha ve kn ee re pl acement s ur ge ry in20 09 .-4 -

Pet it io ne r ackno wled ge d at tria l tha t h e h as ne ve r subm itte d t o am ed ic al ex am in at io n a t a Dep art m en t o f Vet eran s Aff ai rs (VA) faci li ty norrece iv eda di sabi li ty rati ng fro m

th e VA. The rec or d d oe s n otin cl ud e an y m ed ic al reco rd s o r ot he r do cu m en ts rel at edto th e kne e rep la cem en t s ur ge ry th atpe ti ti on er re ferr edto orhi s p hysic al co nd it io n i n 2 01 1. II. Tax Rep orti ng DFAS rep orte d o n F orm

10 99 -R, Dis tri bu ti on s Fr om Pen si on s, An nu it ie s, Ret ire m en t o r Pro fit -Sh ari ng Pla ns , IRAs, In su ran ce Co nt ract s, et c., th atpe ti ti on er rece iv edtax ab le ret ire m en t p ay of $ 13 ,50 5 i n 2 01 1. Pe ti ti on er t im el y fil eda Fed eral in co m e ta x re tu rnfor 20 11 . Alth ou gh he rep orte d tha t h e rec ei ve d wag es of $8 8,0 95 fro m

Grub b & Ell is Man ag em en t Se rv ic es in20 11 , he d idno t i nc lu de hi s m il it ary ret ire m en t p ay as a n i te m

of g ro ss in co m e. 2 III. The Part ie s’ Pos it io ns Res po nd en t i ss ue d t o p et it io ne r a n ot ic e o f de fic ie nc y for20 11 de te rm in in g th athi s m il it ary ret ire m en t p ay m us t b e in cl ud edas an i te m of g ro ss in co m e. Res po nd en t as se rts th atpe ti ti on er’s m il it ary ret ire m en t p ay is no t ex cl ud ab le fro m

The reco rdrefl ect s tha t p et it io ne r’s fil in g s ta tu s fo r th e y ear i n i ss ue was 2 m arri edfil in g s ep arat e.-5 -

gr os s i nc om e und er s ect io n 1 04 (a)( 4) be cau se he fai le d t o s ho w th e am ou nt , if an y , th athe wou ldbe en ti tl edto rece iv e as di sabi li ty com pe ns at io n fr om

th e VA. Pet it io ne r fi le d ape ti ti on forred et erm in at io n wi th th e Co urt as se rti ng th at hi s m il it ary ret ire m en t p ay is ex cl ud ab le fro m

gro ss in co m e und er s ect io n 10 4( a)(4 ) be cau se he is cert ai n tha t h is kn ee i nju ry wou lden ti tl e h im

to anaward of VA di sabi li ty ben efi ts withi n the m ean in g o f se ct io n 1 04 (b ). He furth er as se rts th atex cl ud in g h is ret ire m en t p ay fro m gro ss in co m e is co ns is te ntwith i ns tru ct io ns co nt ai ne d i n In te rn al Rev enue Serv ic e (IR S) Publ ic at io n 5 25 , Taxabl e an d Non ta xabl e In co m e. Dis cu ss io n The Co m m is si on er’s d et erm in at io ns ina no ti ce o f de fic ie nc y are g en eral ly pr es um edco rrec t, an d the tax pa y er n orm al ly bears th e b ur de n o f pr ov in g tho se de te rm in at io ns are erro ne ou s. Ru le 14 2( a)(1 ); Welc h v . Helv eri ng , 29 0 U.S. 1 11 , 11 5 (1 93 3) . Peti ti on er d oe s n otco nt en d tha t the bu rd enof p ro of sh ou ldbe sh ift ed to res po nd en t u nd er s ect io n 7 49 1( a), an d the re i s n o s up po rt i n the reco rdfor do in g s o. It fo ll ows th atpe ti ti on er b ears th e b ur de n o f pr oo f in th is cas e.

3

It i s wo rth no ti ng th atpe ti ti on er d oe s n otdi sp ut e th athe rece iv ed 3 ret ire m en t p ay

of $ 13 ,50 5 fr om

DFAS.-6 -

Sect io n 6 1( a) p ro vi de s tha t g ro ss in co m e m ean s “ al l i nc om e fro m what ev er so ur ce d eri ve d” . Pen si on s an d re ti rem en t al lo wan ces co ns ti tu te gro ss in co m e un le ss ex cl ud edby law. Sec. 6 1( a)(1 1) ; s ec. 1 .61 -1 1( a), In co m e Tax Reg s. Mi li tary ret ire m en t p ay

is pe ns io n i nc om e wit hi n the m ean in g o f se ct io n 6 1( a)(1 1) . Whe el er v . Comm is si on er, 1 27 T.C. 20 0, 2 05 n.1 1 (2 00 6) , aff’d, 5 21 F.3d12 89 (1 0t h C ir. 2 00 8) . It i s wel l es tabl is he d tha t s ta tu to ry ex cl us io ns fro m

in co m e are na rro wly co ns tru ed . Comm is si on er v . Sch le ie r, 51 5 U.S. 3 23 , 32 8 (1 99 5) . Taxp ay ers se ek in g a n e xc lu si on fro m in co m e m

us t d em on st rat e th atth ey are el ig ib le forth e ex cl us io n a nd“br in g the m se lv es withi n the cle ar s co pe of t he ex cl us io n.” Dob ra v. Co m m is si on er, 1 11 T.C. 33 9, 3 49 n.1 6 (1 99 8) . I. Lim it edExcl us io n o f Mi li tary Ret ire m en t Pa y

Fro m Gros s In co m e Sect io n 1 04 (a)( 4) pro vi de s the ge ne ral rul e th atam ou nt s re cei ve d a s a pe ns io n, an nu ity , or s im il ar al lo wan ce fo r pe rs on al in juri es or s ic kn es s re su lt in g fro m act iv e se rv ic e in th e arm edfor ces of a ny cou nt ry are n otin cl ud edingro ss in co m e. Sect io n 1 04 (b )(1 ) an d (2 )(D), h owe ve r, li m it s the ex cl us io n p res cri be d

4 in subs ect io n (a )(4 ), as rel ev an t h ere, t o a n i nd iv idua l wh o “ onap pl ic at io n the refo r Altho ug h the re i s n o d is pu te th atpe ti ti on er i nju redhi s kne e in a 4 wate rs ki in g a cci de nt , res po nd en t d oe s n otass ertth atpe ti ti on er’s i nju ry di d n ot res ul t fr om

“ act iv e se rv ic e in th e arm edfor ces ”.-7 -

* * * wo ul d b e en ti tl edto rece iv e d is ab il ity co m pe ns at io n fr om

th e Vet eran s’ Adm in is tra ti on .” Sect io n 1 04 (b )(4 ) furth er p ro vi de s tha t i f anin di vi du al is 5 de sc rib edinsubs ect io n (b )(2 ), th e am ou ntex cl ud ab le fro m gro ss in co m e und er subs ect io n (a )(4 ) fo r an y

pe rio d “ sh al l n otbe les s tha n the m ax im um am ou nt whi chsu chin di vi du al , onap pl ic at io n the refo r, wou ldbe en ti tl edto rece iv e as di sabi li ty com

pe ns at io n fr om

th e Vet eran s’ Adm in is tra ti on .” 6 The res tri ct io ns im

po se d i n s ect io n 1 04 (b ) are be tt er u nd ers to odinth e li gh t of th e le gi sl at iv e h is to ry

un de rlyin g the Tax R efo rm Act o f 19 76 , Pub . L. No. 94 - 45 5, s ec. 5 05 (b ), 90 Sta t. at15 67 . At th atti m e Co ng res s re co gn iz edth atth e

W ith l im it edex cep ti on s, b en efi ts adm in is te redby the VA hav e lo ng be en 5 ex em ptfro m tax at io n. Se e 3 8 U.S.C. s ec. 3 10 1( a) (1 95 8) (th e p red eces so r to 38 U.S.C. se c. 53 01 (a)( 1) (20 12 )); W al la ce v . Comm is si on er, 1 28 T.C. 13 2, 1 41 n.5 (2 00 7) . InRei m el s v . Comm is si on er, 1 23 T.C. 24 5, 2 57 (20 04 ), aff’d, 4 36 F.3d34 4

6 (2 d C ir. 2 00 6) , we st at edinrel ev an t p art : [A]lth ou gh sec ti on 10 4( b) (4 ) is no t a m od el of c larit y , it s l eg is la ti ve hi st ory su gg es ts th atitwas i nt en de d t o app ly w ith re sp ectto ret ire d m il it ary pe rs on ne l wh o d o n otrece iv e th e Vet eran s’ Adm in is tra ti on be ne fit s t o wh ic h the y

are o th erwi se en ti tl ed . In ce rta in cir cu m st an ces , sec ti on 10 4( b) (4 ) pr ov id es su chpe rs on s wi th a ta x b en efi t at le as t as gre atas t he tax ex em pt io n tha t wo ul d h av e b eenav ai labl e fo r th e fo rg on e Vet eran s’ Adm in is tra ti on be ne fit s.-8 -

ex cl us io n fr om

gro ss in co m e p res cri be d i n s ect io n 1 04 (a)( 4) in vi te d t ax pa y er ab us e, whi chitde sc rib edinrel ev an t p artas f ol lo ws: Cri ti ci sm of t he ex cl us io n o f arm edfor ces di sabi li ty pen si on s fro m in co m e fo cu se s o n anu m be r of cas es in vo lv in g the di sabi li ty ret ire m en t o f m il it ary pe rs on ne l. Inm an y cas es , arm edfor ces pe rs on ne l h av e b eencla ss ifi edas d is ab le d fo r m il it ary se rv ic e sh ortl y be fo re the y

wou ldha ve be co m e el ig ib le forret ire m en t p rin ci pa ll y to ob ta inth e b en efi ts of t he sp eci al tax ex cl us io n o n the di sabi li ty po rti on of t he ir r et ire m en t p ay . In m os t o f th es e cas es th e in di vi du al s, ha vi ng ret ire d fr om

th e m il it ary, earn in co m e fro m othe r em pl oym en t whi le rece iv in g t ax -fre e ‘dis ab il ity ’ pa y m en ts fro m

th e m il it ary. The co m m it te e que st io ns th e equi ty of al lo win g re ti redm il it ary pe rs on ne l to ex cl ud e th e p aym en ts whi chth ey rece iv e as tax -ex em

ptdi sabi li ty in co m e whe n the y

are ab le to earn subs tant ia l am ou nt s o f in co m e fro m civ il ian wo rk , des pi te di sabi li ti es su chas h ig h b lo odpre ss ur e, arthr it is , etc . * * * * * * * The co m m it te e am en dm en t el im in at es th e ex cl us io n o f di sabi li ty paym en ts fro m

in co m e fo r th os e co ve redun de r se ct io n 10 4( a)(4 ), th atis , m em

be rs of t he arm edfor ces of a ny cou ntry , NOAA, the Publ ic Heal th Serv ic e an d the Fo rei gn Serv ic e. Thi s ch an ge ap pl ie s o nl y

pro sp ect iv el y

to pe rs on s wh o jo in th es e go ve rn m en t s erv ic es aft er Se pt em be r 24 , 19 75 . Spe ci fic ex cep ti on s co nt inue th e ex cl us io n i n c ert ai n c as es forfutur e d is ab il ity pa ym en ts fo r in juri es an d s ic kn es s re su lt in g fr om act iv e se rv ic e in th e arm ed fo rces of t he Uni te d S ta te s. At al l t im es , Veter an s’ Adm in is tra ti on di sabi li ty paym en ts wil l co nt inue to be ex cl ud edfro m gro ss in co m e. Inad di ti on , eve n i f a fu tu re s erv ic em anwho ret ire s d oe s n otrece iv e h is di sabi li ty ben efi ts fro m th e Vet eran s’ Adm in is tra ti on , he wi ll st il l b e al lo wedto ex cl ud e fro m hi s g ro ss in co m e anam ou ntequa l t o the be ne fit s h e co ul d rece iv e fro m

th e Vet eran s’ Adm in is tra ti on . Oth erwi se , futur e-9 -

m em be rs of t he arm edfor ces wil l b e al lo wedto ex cl ud e m il it ary di sabi li ty reti rem en t p aym en ts fro m th ei r gr os s i nc om e o nl y

if the pa ym en ts are d ire ct ly relat edto “ co m ba t i nju rie s.” * * * S. Rep t. No . 94 -9 38 , at 1 38 -1 39 (19 76 ), 19 76 -3 C.B. (Vo l. 3 ) 49 , 17 6- 17 7; see Kio urts is v. Co m

m is si on er, T.C. Mem o. 1 99 6- 53 4. II. Dis ab il ity

Rat in gs forMem

be rs of t he Arm edFo rces A. Statut ory

Pro vi si on s- -Tit le 10 At al l t im es rel ev an t t o thi s ca se , 10 U.S.C. ch. 6 1 e st ab li sh edth e st an da rd s an d p ro ces se s b y

whi chth e Arm edFo rces (in cl ud in g the Navy) de te rm in e 7 whe th er a s erv ic e m em

be r m ay be ret ire d o r se pa rat edfro m servi ce b ecau se of a m ed ic al di sabi li ty. A serv ic e m em be r with adi sabi li ty who othe rwis e wou ldbe en ti tl edto ret ire pe rm an en tl y un de r th e p ro vi si on s o f 10 U.S.C. sec . 12 01 (20 12 ), bu t wh os e d is ab il ity

is no t d et erm in edto be pe rm an en t an d s tabl e, is eli gi bl e to be pl acedintem

po rary dis ab il ity

ret ire m en t s ta tu s. See id . sec . 12 02 . A serv ic e m em be r in tem

po rary dis ab il ity

ret ire m en t s ta tu s m

us t s ub m itto pe rio di c p hysic al ex am in at io ns , anda de te rm in at io n wh ethe r a p art ic ul ar d is ab il ity is pe rm an en t an d st ab le m us t b e m ad e wit hi n fi ve y ears . See i d. s ec. 1 21 0( a) an d (b ).

The U.S. Navy is a m il it ary se rv ic e an d abra nc h o f th e Arm edFo rces of 7 th e Uni te d S ta te s. See 10 U.S.C. sec . 10 1( a)(4 ) (2 01 2) .-1 0-

A servi ce m em

be r with ape rm an en t an d s tabl e p hysic al di sabi li ty who is fo un d t o b e unf

itforfurth er dut y

is eli gi bl e to rece iv e ret ire m en t p ay if the m em be r ha s atlea st20 y ears of s erv ic e o r hi s d is ab il ity is rat edat l eas t 3 0% u nd er th e VA st an da rdsch edul e o f rat in g d is ab il it ie s (VASR D). See i d. s ec. 1 20 1. 8 Dis ab il ity ret ire m en t p ay

is co m pu te d a s the hi gh er o f (1 ) th e se rv ic e m em be r’s ba se pa y m ul ti pl ie d b y

2.5 % foreach y ear o f m il it ary se rv ic e o r (2 ) th e se rv ic e m em be r’s ba se pa y

m ul ti pl ie d b y

hi s d is ab il ity

rat in g (i n thi s ca se 30 %). See i d. se c. 14 01 . B. Sta tu to ry

Pro vi si on s- -Tit le 38 The Uni te d S ta te s wi ll co m pe ns at e a v et eran of t he arm edfor ces fora di sabi li ty resu lt in g fr om

pe rs on al in

jury suff eredor d is eas e co nt ract edinth e li ne of du ty andinact iv e se rv ic e if th e v et eran was d is ch arg edor r el eas edun de r co nd it io ns othe r th andi sh on or ab le an d i f th e d is ab il ity is no t the res ul t o f th e ve te ran ’s ownwil lfu l m is co nduc t o r ab us e o f al co ho l o r dr ug s. See 38 U.S.C. se cs . 11 10 , 11 31 (20 12 ). In t hi s re ga rdth e VA is au th or iz edto ad op t a s ch edul e of rat in gs of r educ ti on s i n e arn in g c ap aci ty from sp eci fic in

juri es ba se d, as far as pr act ic ab le , up on th e av erag e im pa irments of e arn in g c ap aci ty resu lt in g fr om su ch in juri es inciv il oc cupa ti on s. See id . sec . 11 55 (pr ov id in g i n p ert in en t p artth atth e The VASRD is setforth at 3 8 C .F.R. pt . 4 (2 01 2) . 8-1 1-

VASRD sh al l b e co ns tru ct edso as t o p ro vi de on ly 10 g rad es of d is ab il ity , e.g., 10 %, 20 %, andso on , up on whi chpa ym en ts of c om pe ns at io n s ha ll be ba se d) . By way of e xam pl e, th e VARSD p ro vi de s the fol lo win g d is ab il ity rat in gs in res pe ctof a n i nd iv idua l wh o h as ha d kne e rep la cem en t s ur ge ry : 50 55 Kne e rep la cem en t (p ro st he si s) . Pro st he ti c rep la cem en t o f kn ee joi nt : Fo r 1 year fo ll owi ng im

pl an ta ti on of p ro st he si s . . . . . . . . 10 0 W ith c hr on ic res idua ls co ns is ti ng of s ev ere p ai nf ul m ot io n o r weakne ss inth e affe ct edex tre m ity . . . . . . . . . . 60 W ith i nt erm ed ia te de gr ees of r es idua l wea kn es s, pa in or l im it at io n o f m ot io n ra te by anal og y to di ag no st ic co de s 5 25 6, 5 26 1, o r 52 62 . Min im um rat in g . . 3 0 See 3 8 C .F.R. se c. 4.7 1a(20 12 ). Mo nt hl y co m pe ns at io n a m ou nt s fo r eac h o f th e VA’ s 1 0 g rad es of d is ab il ity are f ix edby statut e. See 3 8 U.S.C. s ecs . 11 14 , 11 34 (20 12 ). Co m pe ns at io n am ount s i nc reas e if

th e d is ab le d s erv ic e m em be r ha s a s po us e an d/ orde pe nd en ts . See Dep t. o f Vet eran s Aff ai rs , Veter an s B en efi ts Adm in is tra ti on , Com pe ns at io n Rat e Tab le (Dec. 1 , 20 09 ), ht tp ://www.b en efi ts .va .go v/ co m pe ns at io n/ res ou rces

_ co m p0 10 9.a sp .-1 2-

III. Whethe r Pet it io ne r Is Ent it le d t o VA Dis ab il ity Ben efi ts Whe n the Navy det erm in edth atpe ti ti on er was pe rm an en tl y di sabl edan d un fitfor furth er duty , he d idno t h av e th e 2 0 years o f se rv ic e n eed edto qu al ify for a d is ab il ity

ret ire m en t. The Navy con cl ud ed , ho wev er, tha t h e was en ti tl edto a di sabi li ty reti rem en t (andth e p aym en ts th atgo with tha t s ta tu s) be cau se hi s VASRD di sabi li ty rati ng equa le d 3 0%. See 10 U.S.C. sec . 12 01 . As d is cu ss edab ov e, se ct io n 1 04 (b )(2 ) li m it s the ex cl us io n fr om gro ss in co m e fo r di sabi li ty paym en ts to in di vi du al s wh o, upo n app li cat io n, wo ul d b e en ti tl edto rece iv e d is ab il ity co m pe ns at io n fr om

th e VA. Sect io n 1 04 (b )(4 ) pr ov id es th atth e am ou ntex cl ud edun de r subs ect io n (a )(4 ) wil l n otbe les s tha n the m ax im um am ountwhi chth e in di vi du al wou ldbe en ti tl edto rece iv e as di sabi li ty co m pe ns at io n fr om

th e VA. The i ns tru ct io ns inIRS Publ ic at io n 5 25 th at pe ti ti on er ci te d i n h is pe ti ti on m erel y tra ckth e st atut e. Altho ug h the Navy andth e VA app ly the same rati ng st an da rd s- -th e VASRD-- the Navy andth e VA app ro achth e que st io n o f di sabi li ty rati ng s fr om di ffer en t p ers pe ct iv es . Whe reas th e Nav y foc us es on whet he r a s erv ic e m em be r is ab le to pe rfo rm

hi s o r he r m il iary

du ti es at agi ve n t im e, th e VA rat es di sabi li ti es by weig hi ng th e im

pa ctof a n i nju ry

or i ll ne ss on a ve te ran ’s earn in g c ap aci ty in a ci vi l o ccupa ti on ov er h is or h er l ife ti m e. Sti ne v. Un it edSta te s, 9 2 F ed . Cl. 7 76 ,-1 3-

79 5 (2 01 0) (“ [A] rati ng di sp ari ty betweenth e two syste m s i s n otun us ua l b ecau se of th e d iff eri ng st an da rd s tha t m

us t b e ap pl ie d.” ), aff’d, 4 17 F. App ’x 97 9 (F ed . Ci r. 20 11 ); s ee Lo ckwoo d v . Uni te d S ta te s, 9 0 F ed . Cl. 2 10 , 21 9 (2 00 8) (“ Bo th th e Dep artm en t o f Vet eran s Aff ai rs an d the m il it ary se rv ic e b ran ch es rel y on th e * * * (VASRD), h owe ve r, th ey do so indi ffer en t ways.”); see als o C le ary v. Co m m is si on er, 6 0 T.C. 1 33 , 14 0 n .10 (19 73 ) (‘“ [T]he b as is for* * * [VA] acti on is di ffer en t fr om

th e b as is up onwhi cha ret iri ng bo ardde te rm in es whet he r or no t anoff ic er i s en ti tl edto ret ire m en t fo r ph y si cal di sabi li ty[.] ”’ (qu ot in g F ur lo ng v. Uni te d S tate s, 1 53 Ct. Cl . 55 7, 5 65 (19 61 ))). As the ex am

pl e fro m th e VASRD ab ov e sh ows , an i nd iv idua l wh o h as un de rg on e kne e rep la cem en t s ur ge ry wou ldbe subjec t t o adi sabi li ty rati ng ran gi ng fro m

a hi gh of 1 00 % inth e y ear fo ll owi ng th e su rg ery to a rat in g a s l ow as 30 % de pe nd in g o n h is reco ve ry an d s ym pt om s. No tabl y , pet it io ne r’s m on th ly ret ire m en t b en efi t o f ap pr ox im at el y $1 ,12 5 i n 2 01 1 was co ns id erab ly m or e th an th e m on th ly VA ben efi t fo r a v et eran with a30 % di sabi li ty pres cri be d i n 3 8 U.S.C. se cs . 11 14 an d 1 13 4. Altho ug h we app reci at e th e se rio us ne ss of p et it io ne r’s in jury, we la ckan y ob jecti ve ev id en ce t o d et erm in e whe th er the VA wou ldha ve award edhi m di sabi li ty com

pe ns at io n i n 2 01 1. Pe ti ti on er ac kn owl ed ge d a t tria l tha t h e h as-1 4-

ne ve r subm it te d t o aph y si cal ex am in at io n a t a VA fac il ity no r be enaward eda di sabi li ty rati ng by the VA. A si de fro m hi s o wn t es ti m on y

th athe is cert ai n tha t he is en ti tl edto VA di sabi li ty ben efi ts , pet it io ne r di d n otoff er an y ob jecti ve ev id en ce s ho win g tha t h e h adkn ee re pl acement s ur ge ry in20 09 or h is ph y si cal co nd it io n i n 2 01 1 tha t wo ul d p erm itth e Co urt t o c on cl ud e th athe wou ldbe en ti tl edto rece iv e d is ab il ity co m pe ns at io n fr om

th e VA, and , if s o, the am ountof th atco m pe ns at io n. Co ns eque nt ly, we are u nabl e to co nc lu de th atan y am ou ntof hi s d is ab il ity

ret ire m en t p ay

is ex cl ud ab le fro m

gro ss in co m e und er s ect io n 10 4( a)(4 ). To re fle ctth e fo reg oi ng , Deci si on wil l b e en te red fo r res po nd en t.