CREATE TABLE TEST
( LFD NUMBER
, FIRSTNAME VARCHAR2(20)
, STATE VARCHAR(1)
);

INSERT INTO TEST (LFD, FIRSTNAME, STATE)
VALUES ( 1, 'JOHN', 'A');
INSERT INTO TEST (LFD, FIRSTNAME, STATE)
VALUES ( 2, 'JIM', 'X');
INSERT INTO TEST (LFD, FIRSTNAME, STATE)
VALUES ( 3, 'JERRY', 'T');
INSERT INTO TEST (LFD, FIRSTNAME, STATE)
VALUES ( 4, 'JACK', 'A');
INSERT INTO TEST (LFD, FIRSTNAME, STATE)
VALUES ( 5, 'JOSHUA', 'X');

--TRUNCATE TABLE TEST;

with
  t_yes as
  (select lfd, firstname, state
   from test
   where state in ('A', 'T')
  ),
  t_no as
  (select lfd, firstname, state
   from test
   where state in ('A', 'T', 'X')
  )
select lfd, firstname, state
  from t_yes
  where :P1_SWITCH = 'y'
union
select lfd, firstname, state
  from t_no
  where :P1_SWITCH = 'n'
order by lfd;

SQL> set verify off
SQL>
SQL> with
  2    t_yes as
  3    (select lfd, firstname, state
  4     from test
  5     where state in ('A', 'T')
  6    ),
  7    t_no as
  8    (select lfd, firstname, state
  9     from test
 10     where state in ('A', 'T', 'X')
 11    )
 12  select lfd, firstname, state
 13    from t_yes
 14    where '&&switch' = 'y'
 15  union
 16  select lfd, firstname, state
 17    from t_no
 18    where '&&switch' = 'n';
Enter value for switch: y

       LFD FIRSTNAME            S
---------- -------------------- -
         1 JOHN                 A
         3 JERRY                T
         4 JACK                 A

SQL> undefine switch
SQL> /
Enter value for switch: n

       LFD FIRSTNAME            S
---------- -------------------- -
         1 JOHN                 A
         2 JIM                  X
         3 JERRY                T
         4 JACK                 A
         5 JOSHUA               X

SQL>

where state in ('A', 'T') or :P1_SWITCH = 'n'