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Having altitude reporting enabled persistently seems like a pretty common-sense thing to do -- it enables RA in addition to TA, the benefits of which are fairly obvious. That said, most of the common transponders installed in GA and commercial aircraft have either the option to explicitly turn on (typically on GA) or to explicitly turn off (typically on commercial) altitude reporting.

Are there any normal or abnormal flight conditions which would make it impractical, unsafe, or impossible to have altitude reporting turned off?

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    $\begingroup$ Most GA aircraft don't have TCAS... Also since ADS-B was mandated, altitude reporting should be on all the time, you make an effort to turn it off... $\endgroup$
    – Ron Beyer
    Commented Feb 15, 2020 at 23:39
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    $\begingroup$ Before ADS-B was mandated it was normal to disable transponder altitude reporting (and in some locations all reporting) when on the ground as it saturated nearby TCAS. This was especially true with Mode A/C (ATCRBS) transponders. With ADS-B and many GA moving to Mode S (to get ADS-B) this is less of an issue as Mode S/ADS-B reports 'on ground'. Regardless, when airborne ATC will tell you to turn off altitude reporting if it is not accurate. If it's not accurate, it is a hazard as TCAS processes the data it gets - right or wrong. $\endgroup$
    – Gerry
    Commented Feb 17, 2020 at 16:24

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The only time it would make sense as a normal or abnormal procedure to turn off altitude reporting is when your static encoder system is reporting no or incorrect altitude information. Especially in today’s world of mandatory Mode C and/or ADS-b in certain airspaces. ATC in those airspaces may have you cycle your system temporarily. Or, they could have you permanently turn it off while you either land as soon as practicable or vacate the airspace until the system is repaired.

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