Disablity claims by retired policemen

[dyne]

Recently I heard that many retired policeman are claiming they are disabled and are exempt from FEDERAL income tax on their retirement benefits. Notice they claim they are exempt from FEDERAL income tax. Amended returns 1040-X are being filed by some tax preparers. They claim a Revenue Ruling or Revenue Procedure provides such authority but I cannot find any such authority. The policemen are filing claiming this disability AFTER they retire on regular retirement. Their 1009-R's are coded 7, NOT 3 for being disabled. Does anyone have any authority or comments?

[gkaiseril]

I would check with their employer or plan.

Some municipalities pay disability from the retirement and may exclude this as disability until retirement. Chicago does this but there is a special IRS letter that authorizes this policy.

[Larmil]

Been there, Done that

I would check with their employer or plan.

Some municipalities pay disability from the retirement and may exclude this as disability until retirement. Chicago does this but there is a special IRS letter that authorizes this policy.

I agree. It is basically a sub for worker's comp. It must be authorized and the payments become taxable at retirement age.