Legal Question in Administrative Law in California

I think you must have meant to write ".....because they say that taking withdrawals from an IRA is considered income" (without the "not').

It seems to me that your dispute revolves around the definition of "income" used in the rate offer or tariff or price sheet the phone company is using. As I understand it, IRA withdrawals are treated as "taxable income" but not as "earned income." This would be based on Internal Revenue Service concepts describing income.

So, the question becomes, what kind of income does the phone company look at in determining eligibility for the lower rate? My hunch is they are using the broad definition of taxable gross income, which would include wages, salaries, interest, dividends, pensions, alimony, capital gains and IRA distributions.

If this is AT&T, ask them for a copy of the applicable teriff item and see if "income" is defined.