An Act to amend the Internal Revenue Code of 1954 and incorporate therein provisions for the payment of annuities to widows and certain dependents of the judges of the Tax Court of the United States, and for other purposes
PL 87-370 (H.R.4317), enacted 10/04/1961

796 
PUBLIC LAW 87-370-OCT. 4, 1961 
[75 ST A T . 
October 4, 1961 
[H. R. 4317] 
Public Law 87-370 
AN ACT 
To amend the Internal Revenue Code of 1954 and incorporate therein provisions 
for the payment of annuities to widows and certain dependents of the judges 
of the Tax Court of the United States, and for other purposes. 
A n n u i t i e s 
to 
widows and chil-
dren. 
68A Stat. 879. 
26 U S C 7 4 4 1-
7447. 
67 Stat. 482. 
69 Stat. 10. 
Be it enacted hy the Senate and House of Representatives 
of the 
cour" ofV s' ^^* United States of America in Congress assembled^ That subchapter C 
'"" ° 
* ' 
of chapter 76 of the Internal Eevemie Code of 1954 (relating to the 
Tax Court of the United States) is hereby amended by adding imme-
diately following section 7447 the following new^ section: 
"SEC. 7448. ANNUITIES TO WIDOWS AND DEPENDENT CHILDREN OF 
JUDGES. 
" (a) DEFINITIONS.—For purposes of this section— 
"(1) The term 'Tax Court' means the Tax Court of the United 
States. 
"(2) The term 'judge' means the chief judge or a judge of the 
Tax Court, including any individual receiving retired pay (or 
compensation in lieu of retired pay) under section 7447 or under 
section 1106 of the Internal Revenue Code of 1939 whether or 
not performing judicial duties pursuant to section 7447(c) or 
pursuant to section 1106(d) of the Internal Revenue Code of 
1939. 
"(3) The term 'chief judge' means the chief judge of the Tax 
Court. 
"^4) The term 'judge's salary' means the salary of a judge 
received under section 7443 (c), retired pay received under section 
7447(d), and compensation (in lieu of retired pay) received under 
section 7447(c). 
"(5) The term 'survivors annuity fund' means the Tax Court 
judges survivors annuity fund established by this section. 
" (6) The term 'widow' means a surviving wife of an individual, 
who either (A) shall have been married to such individual for 
at least 2 years immediately preceding his death or (B) is the 
mother of issue by such marriage, and who has not remarried. 
"(7) The term 'dependent child' means an unmarried child, 
including a dependent stepchild or an adopted child, who is under 
the age of 18 years or who because of physical or mental disability 
is incapable of self-support. 
"(b) ELECTION.—Any judge may by written election filed with 
the chief judge within 6 months after the date on which he takes oiSce 
after appointment or any reappointment, or within 6. months after 
the date upon which he first becomes eligible for retirement under sec-
tion 7 4 4 7 ( D ) , or within 6 months after the enactment of this section, 
bring himself within the purview of this section, except that, in the 
case of such an election by the chief judge, the election shall be filed as 
prescribed by the Tax Court subject to the preceding requirements as 
to the time of filing. 
" ( c ) SALARY DEDUCTIONS.—There shall be deducted and withheld 
from the salary of each judge electing under subsection (b) a sum 
equal to 3 percent of such judge's salary. The amounts so deducted 
and withheld from such judge's salary shall, in accordance with such 
procedure as may be prescribed by the Comptroller General of the 
United States, be deposited in the Treasury of the United States to 
the credit of a fund to be known as the 'Tax Court judges survivors 
annuity fund' and said fund is appropriated for the payment of an-
nuities, refunds, and allowances as provided by this section. Each 
judge electing under subsection (b) shall be deemed thereby to consent 
75 S T A T . ] 
PUBLIC LAW 87-370~OCT. 4, 1961 
797 
and agree to the deductions from his salary as provided in this sub-
section, and payment less such deductions shall be a full and complete 
discharge and acquittance of all claims and demands whatsoever for 
all judicial services rendered by such judge during the period covered 
by such payment, except the right to the benefits to which he or his 
survivors shall be entitled under the provisions of this section. 
"(d) DEPOSITS IN SURVIVORS ANNUITY FUND.—Each judge electing 
under subsection (b) shall deposit, with interest at 4 percent per 
annum to December 31, 1947, and 3 percent per annum thereafter, 
compounded on December 31 of each year, to the credit of the sur-
vivors annuity fund, a sum equal to 3 percent of his judge's salary 
and of his basic salary, pay, or compensation for service as a Senator, 
Representative, Delegate, or Resident Commissioner in Congress, and 
for any other civilian service within the purview of section 3 of the 
Civil Service Retirement Act (5 U.S.C. 2253). Each such judge may 
'° ^'^'- ''^^' 
elect to make such deposits in installments during the continuance of 
his service as a judge in such amount and under such conditions as 
may be determined in each instance by the chief judge. 
Notwith-
standing the failure of a judge to make such deposit, credit shall be 
allowed for the service rendered, but the annuity of the widow of such 
judge shall be reduced by an amount equal to 10 percent of the amount 
of such deposit, computed as of the date of the death of such judge, 
unless such widow shall elect to eliminate such service entirely from 
credit under subsection (n), except that no deposit shall be required 
''"*'' P- *°°-
from a judge for any year with respect to which deductions from his 
salary were actually made under the Civil Service Retirement Act 
5uscf22si^note 
and no deposit shall be required for any honorable service in the 
Army, Navy, Air Force, Marine Corps, or Coast Guard of the United 
States. 
"(e) 
INM58TMENT OF SURVIVORS ANNUITY FUND.—The Secretary of 
the Treasury shall invest from time to time, in interest-bearing securi-
ties of the United States or Federal farm loan bonds, such portions of 
the survivors annuity fund as in his judgment may not be immediately 
required for the payment of the annuities, refunds, and allowances as 
provided in this section. The income derived from such investments 
shall constitute a part of said fund for the purpose of paying annuities 
and of carrying out the provisions of subsections (g), (h), and (j). 
"(f) CREDITING OF DEPOSITS.^—The amount deposited by or deducted 
and withheld from the salary of each judge electing to bring himself 
within the purview of this section for credit to the survivors annuity 
fund shall be credited to an individual account of such judge. 
" (g) TERMINATION OF SERVICE.—If the service of any judge electing 
under subsection (b) terminates other than pursuant to the provisions 
of section 7447 or other than pursuant to section 1106 of the Internal 
Revenue Code of 1939, the amount credited to his individual account, 
^^ ^*°*- *^^-
together with interest at 4 percent per annum to December 31, 1947, 
and 3 percent per annum thereafter, compounded on December 31 of 
each year, to the date of his relinquishment of office, shall be returned 
to him. 
For the purpose of this section, the service of any judge 
electing under subsection (b) who is not reappointed following expira-
tion of his term but who, at the time of such expiration, is eligible for 
and elects to receive retired pay under section 7447 shall be deemed to 
have terminated pursuant to said section. 
"(h) ENTITLEMENT TO ANNUITY.—In case any judge electing under 
subsection (b) shall die. while a judge after having rendered at least 
5 years of civilian service computed as prescribed in subsection (n), 
for the last 5 years of which the salary deductions provided for by 
subsection (c) or the deposits required by subsection (d) have actually 
798 
PUBLIC LAW 87-370-OCT. 4, 1961 
[75 STAT. 
been made or the salary deductions required by the Civil Service 
5us*c225i^note I^etirement Act have actually been made— 
" (1) if such judge is survived by a widow but not by a depend-
ent child, there shall be paid to such widow an annuity beginning 
with the day of the death of the judge or following the widow's 
attainment of the age of 50 years, whichever is the later, in an 
amount computed as provided in subsection (m); or 
"(2) if such judge is survived by a widow and a dependent 
child or children, there shall be paid to such widow an immediate 
annuity in an amount computed as provided in subsection (m), 
and there shall also be paid to or on behalf of each such child an 
immediate annuity equal to one-half the amount of the annuity of 
such widow, but not to exceed $900 per year divided by the number 
of such children or $360 per year, whichever is lesser; or 
"(3) if such judge leaves no surviving widow or widower but 
leaves a surviving dependent child or children, there shall be paid 
to or on behalf of each such child an immediate annuity equal to 
the amount of the annuity to which such widow would have been 
entitled under paragraph (2) of this subsection had she survived, 
but not to exceed $480 per year. 
"The annuity payable to a widow under this subsection shall be 
terminable upon such widow's death or remarriage. 
The annuity 
payable to a child under this subsection shall be terminable upon (A) 
his attaining the age of 18 years, (B) his marriage, or (C) his death, 
whichever first occurs, except that if such child is incapable of self-
support by reason of mental or physical disability his annuity shall 
be terminable only upon death, marriage, or recovery from such dis-
ability. In case of the death of a widow of a judge leaving a depend-
ent child or children of the judge surviving her, the annuity of such 
child or children shall be recomputed and paid as provided in para-
graph (3) of this subsection. In any case in which the annuity of a 
dependent child is terminated under this subsection, the annuities of 
any remaining dependent child or children, based upon the service of 
the same judge, shall be recomputed and paid as though the child 
whose annuity was so terminated had not survived such judge. 
"(i) 
DETERMINATION OF DEPENDENCY AND DISABILITY,—Questions 
of dependency and disability arising under this section shall be deter-
mined by the chief judge subject to review only by the Tax Court, 
the decision of which shall be final and conclusive. The chief judge 
may order or direct at any time such medical or other examinations as 
he shall deem necessary to determine the facts relative to the nature 
and decree of disability of any dependent child who is an annuitant 
or applicant for annuity under this section, and ma^ suspend or deny 
any such annuity for failure to submit to any examination so ordered 
or directed, 
"(j) 
PAYMENTS IN CERTAIN CASES.— 
" (1) In any case in which— 
"(A) a judge electing under subsection (b) shall die while 
in office (whether in regular active service or retired from 
such service under section 7447), before having rendered 5 
years of civilian service computed as prescribed m subsection 
(n), or after having rendered 5 years of such civilian service 
but without a survivor or survivors entitled to annuity bene-
fits provided by subsection (h), or 
"(B) the right of all persons entitled to annuity under 
subsection (h) based on the service of such judge shall 
terminate before a valid claim therefor shall have been 
established, 
26 u s e 7447. 
75 S T A T . ] 
PUBLIC LAW 8 7 - 3 7 0 - O C T . 4, 1961 
799 
the total amount credited to the individual account of such judge, 
with interest at 4 percent per annum to December 31, 1947, and 
3 percent per annum thereafter, compounded on December 31 of 
each year, to the date of the death of such judge, shall be paid, 
upon the establishment of a valid claim therefor, to the person or 
persons surviving at the date title to the payment arises, in the 
following order of precedence, and such payment shall be a bar 
to recovery by any other person: 
"(i) to the beneficiary or beneficiaries whom the judge 
may have designated by a writing filed prior to his death 
with the chief judge, except that in the case of the chief 
judge such designation shall be by a writing filed by him, 
prior to his death, as prescribed by the Tax Court; 
"(ii) if there be no such beneficiary, to the widow of such 
judge; 
"(iii) if none of the above, to the child or children of such 
judge and the descendants of any deceased children by 
representation; 
"(iv) if none of the above, to the parents of such judge 
or the survivor of them; 
"(v) if none of the above, to the duly appointed executor 
or administrator of the estate of such judge; and 
" (vi) if none of the above, to such other next of kin of such 
judge as may be determined by the chief judge to be entitled 
under the laws of the domicile of such judge at the time of 
his death. 
Determination as to the widow, child, or parent of a judge for the 
purposes of this paragraph shall be made by the chief judge with-
out regard to the definitions in subsections (a) (6) and (7). 
"(2) In any case in which the annuities of all persons entitled 
to annuity based upon the service of a judge shall terminate before 
the aggregate amount of annuity paid equals the total amount 
credited to the individual account of such judge, with interest at 
4 percent per annum to December 31, 1947, and 3 percent per 
annum thereafter, compounded on December 31 of each year, to 
the date of the death of such judge, the difference shall be paid, 
upon establishment of a valid claim therefor, in the order of pre-
cedence prescribed in paragraph (1). 
"(3) Any accrued annuity remaining unpaid upon the termina-
tion (other than by death) of the annuity of any person based 
upon the service oi a judge shall be paid to such person. Any 
accrued annuity remaining unpaid upon the death of any person 
receiving annuity based upon the service of a judge shall be paid, 
upon the establishment of a valid claim therefor, in the following 
order of precedence: 
"(A) to the duly appointed executor or administrator of 
the estate of such person; 
"(B) if there is no such executor or administrator payment 
may be made, after the expiration of thirty days from the 
date of the death of such person, to such individual or indi-
viduals as may appear in the judgment of the chief judge 
to be legally entitled thereto, and such payment shall be a 
bar to recovery by any other individual. 
"(k) 
PAYMENTS TO PERSONS UNDER LEGAL DISABILITY.—Where 
any payment under this section is to be made to a minor, or to a per-
son mentally incompetent or under other legal disability adjudged 
by a court of competent jurisdiction, such payment may be made to 
the person who is constituted guardian or other fiduciary by the law 
of the State of residence of such claimant or is otherwise legally 
800 
PUBLIC LAW 87-370-OCT. 4, 1961 
[75 ST AT. 
vested with the care of the claimant or his estate. Where no guardian 
or other fiduciary of the person under legal disability has been 
appointed under the laws of the State of residence of the claimant, 
the chief judge shall determine the person who is otherwise legally 
vested with the care of the claimant or his estate. 
"(1) METHOD or PAYMENT OF ANNUiTiEs.—Annuities granted under 
the terms of this section shall accrue monthly and shall be due and 
payable in monthly installments on the first business day of the month 
following the month or other period for which the annuity shall have 
accrued. 
None of the moneys mentioned in this section shall be 
assignable, either in law or in equity, or subject to execution, levy, 
attachment, garnishment, or other legal process. 
"(m) COMPUTATION OF ANNUITIES.—The annuity of the widow of 
a judge electing under subsection (b) shall be an amount equal to the 
sum of (1) 114 percent of the average annual salary received by such 
judge for judicial service and any other prior allowable service during 
the last 5 years of such service prior to his death, or prior to his 
26 use 7447. 
receiving retired pay under section 7447(d), whichever first occurs, 
multiplied by the sum of his years of judicial service, his years of prior 
allowable service as a Senator, Representative, I>elegate, or Resident 
Commissioner in Congress, his years of prior allowable service per-
formed as a member of the A rmed Forces of the United States, and 
his years, not exceeding 15, of prior allowable service performed as a 
congressional employee (as defined in section 1(c) of the Civil Service 
70 Stat. 743. 
Retirement Act (5 U.S.C. 2251 (c)), and (2) three-fourths of 1 percent 
of such average annual salary multiplied by his years of any other 
prior allowable service, but such annuity shall not exceed 37% percent 
of such average annual salary and shall be further reduced in accord-
ance with subsection (d), if applicable. 
"(n) INCLUDIBLE SERVICE.—Subject to the provisions of subsection 
(d), the years of service of a judge which are allowable as the basis 
for calculating the amount of the annuity of his widow shall include 
his years of service as a member of the United States Board of Tax 
Appeals and as a judge of the Tax Court, his years of service as a 
Senator, Representative, Delegate, or Resident Commissioner in Con-
gress, his years of active service as a member of the Armed Forces of 
the United States not exceeding 5 years in the aggregate and not 
including any such service for which credit is allowed for the purposes 
of retirement or retired pay under any other provision of law, and 
his years of any other civilian service within the purview of section 
70 Stat. 743. 
3 of the Civil Scrvicc Retirement Act (5 U.S.C. 2253). 
"(o) SIMULTANEOUS ENTITLEMENT.—Nothing contained in this sec-
tion shall be construed to prevent a widow eligible therefor from 
simultaneously receiving an annuity under this section and any an-
nuity to which she would otherwise be entitled under any other law 
without regard to this section, but in computing such other annuity 
service used in the computation of her annuity under this section shall 
not be credited. 
"(p) ESTIMATES OF EXPENDITURES.—The chief judge shall submit 
to the Bureau of the Budget annual estimates of the expenditures and 
appropriations necessary for the maintenance and operation of the 
survivors annuity fund, and such supplemental and deficiency esti-
mates as may be required from time to time for the same purposes, 
according to law. The chief judge shall cause periodic examinations 
of the survivors annuity fund to be made by an actuary, who may be 
an actuary employed by another department of the Government tem-
porarily assigned for the purpose, and whose findings and recom-
mendations shall be transmitted by the chief judge to the Tax Court. 
"(q) TRANSITIONAL PROVISION.—In the case of a judge who dies 
76 S T A T . ] 
PUBLIC LAW 87-370-OCT. 4, 1961 
801 
within 6 months after the date of enactment of this section after 
having rendered at least 5 years of civilian service computed as 
prescribed in subsection (n), but without having made an election as 
provided in subsection (b^, an annuity shall be paid to his widow and 
surviving dependents as is provided in this section, as if such judge 
had elected on the day of his death to brin^ himself within the purview 
of this section but had not made the deposit provided for by subsection 
(d). 
An annuity shall be payable under this section computed upon 
the basis of the actual length of service as a judge and other allowable 
service of the judge and subject to the reduction required by subsection 
(d) even though no deposit has been made, as required by subsection 
(h) with respect to any of such service. 
"(r) WAIVER OF CIVIL, SERVICE BENEFITS.—x\nv judge electing 
under subsection (b) shall, at the time of such election, waive all 
benefits under the Civil Service Retirement Act. 
Such a waiver shall 
5 usc?225i^note 
be made in the same manner and shall have the same force and effect 
as a waiver filed under section 7447(g) (3). 
26 use 7447. 
"(s) AUTHORIZATION OF APPROPRIATION.—Funds necessary to carry 
out the provisions of this section may be ajapropriated out of any 
money in the Treasury not otherwise appropriated." 
SEC. 2. The table of sections for part I of subchapter C of chapter 76 
of the Internal Revenue Code of 1954 is amended by adding at the end ^^^6 u s e p r e c. 
thereof the following: 
"Sec. 7448. Annuities to widows and dependent children of judges." 
SEC. a. (a) Section 403(b) of the Internal Revenue Code of 1954 
26 use 403. 
(relating to taxability of beneficiaries under annuities purchased by 
section 501(c) (3) organizations) is amended— 
^*^ ^
*
^
*
- ^^3. 
(1) by striking out subparagraph (A) of paragraph (1) and 
inserting in lieu thereof the following: 
"(A) an annuity contract is purchased— 
"(i) for an employee by an employer described in sec-
tion 501(c) (3) which is exempt from tax under section 
501(a), or 
"(ii) for an employee 
(other than an employee 
described in clause (i)), who performs services for an 
educational institution (as defined in section 151 (e) (4)), 
by an employer which is a State, a political subdivision 
of a State, or an agency or instrumentality of any one or 
more of tne foregoing,"; 
(2) by striking out "the emploj'^er described in section 
501(c) (3) and exempt from tax under section 501(a)," in para-
graph (3) and inserting in lieu thereof the following: "the 
employer described in paragraph (1) (A),"; and 
(3) by inserting before the period in the heading of such sub-
section the following: "OR PUBLIC SCHOOL". 
(b) The amendments made by subsection (a) shall apply with 
Effective date, 
respect to taxable years beginning after December 31,1957. 
Approved October 4, 1961. 
26 use 151.