[114th Congress Public Law 292]
[From the U.S. Government Publishing Office]
[[Page 1499]]
COMBAT-INJURED VETERANS TAX FAIRNESS ACT OF 2016
[[Page 130 STAT. 1500]]
Public Law 114-292
114th Congress
An Act
To restore amounts improperly withheld for tax purposes from severance
payments to individuals who retired or separated from service in the
Armed Forces for combat-related injuries, and for other
purposes. <<NOTE: Dec. 16, 2016 - [H.R. 5015]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Combat-Injured
Veterans Tax Fairness Act of 2016. 10 USC 1212 note.>>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Combat-Injured Veterans Tax Fairness
Act of 2016''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Approximately 10,000 to 11,000 individuals are retired
from service in the Armed Forces for medical reasons each year.
(2) Some of such individuals are separated from service in
the Armed Forces for combat-related injuries (as defined in
section 104(b)(3) of the Internal Revenue Code of 1986).
(3) Congress has recognized the tremendous personal
sacrifice of veterans with combat-related injuries by, among
other things, specifically excluding from taxable income
severance pay received for combat-related injuries.
(4) Since 1991, the Secretary of Defense has improperly
withheld taxes from severance pay for wounded veterans, thus
denying them their due compensation and a significant benefit
intended by Congress.
(5) Many veterans owed redress are beyond the statutory
period to file an amended tax return because they were not or
are not aware that taxes were improperly withheld.
SEC. 3. RESTORATION OF AMOUNTS IMPROPERLY WITHHELD FOR TAX
PURPOSES FROM SEVERANCE PAYMENTS TO VETERANS
WITH COMBAT-RELATED INJURIES.
(a) <<NOTE: Deadline.>> In General.--Not later than 1 year after
the date of the enactment of this Act, the Secretary of Defense shall--
(1) identify--
(A) the severance payments--
(i) <<NOTE: Time period.>> that the Secretary
paid after January 17, 1991;
(ii) that the Secretary computed under section
1212 of title 10, United States Code;
(iii) that were not considered gross income
pursuant to section 104(a)(4) of the Internal
Revenue Code of 1986; and
[[Page 130 STAT. 1501]]
(iv) from which the Secretary withheld amounts
for tax purposes; and
(B) the individuals to whom such severance payments
were made; and
(2) with respect to each person identified under paragraph
(1)(B), provide--
(A) notice of--
(i) the amount of severance payments in
paragraph (1)(A) which were improperly withheld
for tax purposes; and
(ii) such other information determined to be
necessary by the Secretary of the Treasury to
carry out the purposes of this section; and
(B) instructions for filing amended tax returns to
recover the amounts improperly withheld for tax
purposes.
(b) Extension of Limitation on Time for Credit or Refund.--
(1) Period for filing claim.--If a claim for credit or
refund under section 6511(a) of the Internal Revenue Code of
1986 relates to a specified overpayment, the 3-year period of
limitation prescribed by such subsection shall not expire before
the date which is 1 year after the date the information return
described in subsection (a)(2) is provided. The allowable amount
of credit or refund of a specified overpayment shall be
determined without regard to the amount of tax paid within the
period provided in section 6511(b)(2).
(2) Specified overpayment.--For purposes of paragraph (1),
the term ``specified overpayment'' means an overpayment
attributable to a severance payment described in subsection
(a)(1).
SEC. 4. REQUIREMENT THAT SECRETARY OF DEFENSE ENSURE AMOUNTS ARE
NOT WITHHELD FOR TAX PURPOSES FROM SEVERANCE
PAYMENTS NOT CONSIDERED GROSS INCOME.
The Secretary of Defense shall take such actions as may be necessary
to ensure that amounts are not withheld for tax purposes from severance
payments made by the Secretary to individuals when such payments are not
considered gross income pursuant to section 104(a)(4) of the Internal
Revenue Code of 1986.
SEC. 5. REPORT TO CONGRESS.
(a) In General.--After completing the identification required by
section 3(a) and not later than 1 year after the date of the enactment
of this Act, the Secretary of Defense shall submit to the appropriate
committees of Congress a report on the actions taken by the Secretary to
carry out this Act.
(b) Contents.--The report submitted under subsection (a) shall
include the following:
(1) The number of individuals identified under section
3(a)(1)(B).
(2) Of all the severance payments described in section
3(a)(1)(A), the aggregate amount that the Secretary withheld for
tax purposes from such payments.
(3) A description of the actions the Secretary plans to take
to carry out section 4.
(c) Appropriate Committees of Congress Defined.--In this section,
the term ``appropriate committees of Congress'' means--
[[Page 130 STAT. 1502]]
(1) the Committee on Armed Services, the Committee on
Veterans' Affairs, and the Committee on Finance of the Senate;
and
(2) the Committee on Armed Services, the Committee on
Veterans' Affairs, and the Committee on Ways and Means of the
House of Representatives.
Approved December 16, 2016.
LEGISLATIVE HISTORY--H.R. 5015:
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CONGRESSIONAL RECORD, Vol. 162 (2016):
Dec. 5, considered and passed House.
Dec. 9, considered and passed Senate.
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