Reservists called to active duty and enlistees in the armed
forces may qualify for a deferral of taxes owed if they can show
that their ability to pay taxes was affected by their military
service.
The deferral covers active duty members of the military services
— Army, Navy, Air Force, Marine Corps and Coast Guard — and
commissioned officers of the uniformed services — Public Health
Service and the National Oceanic and Atmospheric Administration.
Reservists must be placed on active duty to qualify. National
Guard personnel not serving in a “federalized” status — that is,
called to active duty specifically by the president of the
United States — are not covered.
The deferral applies to taxes that fall due before or during
military service, and extends the payment deadline to six months
(180 days) after the military service ends. No interest or
penalty accrues during the deferral period.
The deferral is not automatic. A taxpayer must apply for it.
When applying, the taxpayer must show how the military service
affected the taxpayer's ability to pay. A taxpayer must also
have received a notice of tax due, or have an installment
agreement with the IRS, before applying for the deferral.
The deferral does not extend the deadline for filing any tax
returns. However, taxpayers in the armed forces may get extra
time to file under other provisions, such as being stationed
overseas, in a combat zone or in a qualified hazardous duty
area, or if they are serving in direct support of a combat zone.
Combat Areas
The following areas of have been designated as combat areas.
1. Afghanistan and the airspace above was designated a combat
zone effective Sept. 19, 2001. 2. The Federal Republic of
Yugoslavia (Serbia/Montenegro) 3. Albania 4. Bosnia and
Herzegovina 5. Croatia 6. Macedonia 7. The Adriatic Sea 8. The
Ionian Sea — north of the 39th parallel 9. The Persian Gulf 10.
The Red Sea 11. The Gulf of Oman 12. The part of the Arabian Sea
that is north of 10 degrees north latitude and west of 68
degrees east longitude 13. The Gulf of Aden 14. The total land
areas of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and
the United Arab Emirates 15. Incerlik Air Base in Turkey,
effective Sept. 21, 2001 16. Pakistan, Tajikistan and Jordan,
effective Sept. 19, 2001 17. Uzbekistan and Kyrgyzstan,
effective Oct. 1, 2001 18. The Philippines, effective Jan. 9,
2002 19. Yemen, effective April 10, 2002 20. Djibouti, effective
July 1, 2002
While deferring back taxes is a helpful notion, a better method
would be simply to waive all taxes on military personnel.
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