Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I was a police officer and in 2004 retired with in the line

Customer Question
of duty injury pension, and...
I was a police officer and in 2004 retired with in the line of duty injury pension, and beginning that year my pension was not taxed. I received a letter stating in 2016 because of recent tax guidance federal income would be with held. Everyhing that I can locate states otherwise?
JA: Thanks. Can you give me any more details about your issue?
Customer: Our normal retirement age is 55, I was 46 when received the injuries, a gun shot would that caused severe damage to left arm and lung, broken back and fracture of left hip. I was medically retired 2004, and had continued to receive non taxable pension based on 66.2/3 of my pay, in December of last I received a notice stating this would now be taxed based on recent tax guidance. My original letter stated my disability and non tax status was based on 1996 "Letter of Ruling" from IRS
JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 1 year ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 40 minutes by:
1/30/2016
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,865
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi,

...

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS (Chartered Retirement Plans Specialist) designations. - I’ve been providing financial & tax advice since 1986.

I can help here

...

The federal law that applies here is IRC § 104.

...

IRC Section 104 provides that compensation for injuries and sickness are not taxable and are excluded from income, further the 1996 PLR that is being referred to here is likely one that was obtained by Ohio Fire and Pension fund.

...

Under the private letter ruling, the IRS ruled that OP&F’s governing statute for disability benefits is in the nature of a workers’ compensation statute under Reg. Section 1.104–1(b), and that the disability benefits of a former police officer or firefighter whose disability resulted from an injury incurred in the line of duty were excludable from income under Section 104(a)(1), unless a portion of this benefit is based on years of service.

...

If your benefit is still being paid based purely on 2/3 of your pay at the time of disability I would disagree with the application of that PLR - and private letter rulings are specific to the requester anyway, and should NOT be used as (do not have the authority of) law....

...

Law takes two forms; Statute law created by congress, and case law created by the courts

..

The real statute law here law here IS IRC §104.

...

The case law here is Bakken v. Commissioner, TCS 2011-55

...

In Bakken the U.S. tax court concluded that the disability income of a police officer who was injured in the line of duty and became permanently disabled remained nontaxable under Section 104 when he reached the eligible retirement age under the plan.

...

Now, under the PLR requested by Ohio, the issue was that in Ohio, when a member has 25 or more years of service at the time of retirement, a portion of an on-duty partial disability benefit is based on their service credit That portion is taxable as a service benefit.

...

It's that years of service portion that the PLR said would be taxable

...

So the application to your situation will depend on whether, in the PLAN DOCUMENT, your pension at retirement age may now be based, at least in part on years of service.

...

The task at had HERE is to get hold of the plan document *(not some administrator's publication, or spread sheet or explanation) and see whether your benefit is at any point determined on you years of service.

...

* A "Plan Document" is the ruling document that the pension administrators MUST adhere to (and make available to participants) BY LAW.

...

If it turns out that NO part of your benefit is based on years of service, then I would contact an attorney licensed in your state (and contacting others that may be similarly affected may also be helpful) to usefight this.

...

What you want to do is show that your state's governing statute for disability benefits is in the nature of a workers’ compensation statute under Reg. Section 1.104–1(b), ... and that the disability benefits of a former police officer or firefighter whose disability resulted from an injury incurred in the line of duty are excludable from income under Section 104(a)(1) ... and that under Bakken v. Commissioner, TCS 2011-55, the benefit is still not taxable after retirement.

Ask Your Own Tax Question
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Hi,

...

I’m just checking back in to see how things are going.

...

Did my answer help?

...

Let me know…

...

Thanks

Lane

Ask Your Own Tax Question
Customer reply replied 1 year ago
It was great help, spoke with the people at my retirement, they sais they are using info from the irs web site to determine this, think that is nonsense.
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

If your pension isn't based on years of service but continues to be based on 2/3 of pay, stay on 'em,

...

Glad I could help.

...

Would really appreciate your positive rating using the stars or rating request.

..

That's the only be I'll be credited for my time .

..

Thanks,

Lane

Ask Your Own Tax Question
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,865
12,865 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Can you tell me if i have retired and rolled all pension and
can you tell me if i have retired and rolled all pension and 401s into a IRA that I now take distributions from to live on.....do I have to pay Hawaii State taxes on the distributions?....the Hawaii C… read more
Lane
Lane
JD, CFP, MBA, CRPS
12,865 satisfied customers
Do you have to include VA Disability Compensation in Section
Do you have to include VA Disability Compensation in Section G (Non-Wage Household Income) on IRS Form 433F… read more
abci168
abci168
Principal
27 satisfied customers
I am retired and my only income is SS retirement benefits.
I am retired and my only income is SS retirement benefits. My wife works and will make about $40,000.00 in 2017. I want to file married filing separate for 2017 - avoiding an any tax on my SS benefits… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I need a copy of my 2015 federal income tax ( I need a copy
I need a copy of my 2015 federal income tax ( I need a copy of my federal income tax W2 form. How do I go about getting a copy? … read more
abci168
abci168
Principal
27 satisfied customers
I would like to know how to get my voluntary federal income
I would like to know how to get my voluntary federal income amount changed to 0. I do not want any federal income to come out of my check … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
Where can I get the Federal income tax regulation? Where can
Where can I get the Federal income tax regulation? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I asked for an Federal Income Tax extension to 10/16/17 and
I asked for an Federal Income Tax extension to 10/16/17 and I paid taxes due. This was for 2016. Am I able to extend it further?… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
I'm going my federal income taxes. I have a small business.
I'm going my federal income taxes. I have a small business. I have 1099s from some of the companies that paid me, and the rest were individuals, various amounts. I listed all the 1099s separately in T… read more
abci168
abci168
Principal
27 satisfied customers
We have a NOL carryover on our federal income taxes. While I
We have a NOL carryover on our federal income taxes. While I was working on our taxes this week, I noticed an error was made in 2013, 2014 and 2015 in the calculation of the NOL carryover. I neglected… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2 FROM HER EMPLOYER WITH A TYPO IN THE SOCIAL SECURITY NUMBER. TO DATE THE EMPLOYER HAS NOT PROVIDED A "CORRECTED" FORM W-2. IS THERE AN IRS "… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Is Worker's Compensation payment to be added as income? I
Is Worker's Compensation payment to be added as income? … read more
Lane
Lane
JD, CFP, MBA, CRPS
12,865 satisfied customers
US FEDERAL INCOME TAX. QUESTION: A SINGLE WOMAN OWNS A
US FEDERAL INCOME TAX. QUESTION: A SINGLE WOMAN OWNS A HOUSE, HER PRINCIPAL RESIDENCE, AND LIVES IN IT FOR 4 YEARS. IN 2017 SHE MARRIES A MAN WHO WILL ALSO USE IT AS HIS PRINCIPAL RESIDENCE BUT NOT HA… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
What is the ADDRESS of the Federal Income Tax Service?????
What is the ADDRESS of the Federal Income Tax Service????? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
My income in the U.S. is a federal pension. If I move to
My income in the U.S. is a federal pension. If I move to Spain as a non-working resident how will I be taxed? By the U.S. or by Spain or buy both? … read more
Lane
Lane
JD, CFP, MBA, CRPS
12,865 satisfied customers
I SUBMITTED MY FEDERAL INCOME TAX FORM BY MAIL ON JAN 10.
I SUBMITTED MY FEDERAL INCOME TAX FORM BY MAIL ON JAN 10. 2017. I HAVE NOT RECEIVED THE $2204.00 REFUND DUE YET AND CAN GET NO INFO ON LINE ON WHY THE REFUND HAS NOT BEEN SENT. … read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
285 satisfied customers
Federal income tax question to determine if gift taxes are
Federal income tax question to determine if gift taxes are involved. … read more
socrateaser
socrateaser
1,031 satisfied customers
I actually have a Tax question. Federal Income Tax, State.
I am wondering about tax liability on a small inheritance from my mother.… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Form 1040 line #44 what taxes--federal income tax + social
form 1040 line #44 what taxes--federal income tax + social security +medicare tax, all or just federal? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x