Reservists, Enlistees May Get Deferral Of Back Taxes
By Richard A. Chapo, Fri Dec 9th
Reservists called to active duty and enlistees in the armedforces may qualify for a deferral of taxes owed if they can showthat their ability to pay taxes was affected by their militaryservice.
The deferral covers active duty members of the military services— Army, Navy, Air Force, Marine Corps and Coast Guard — andcommissioned officers of the uniformed services — Public HealthService and the National Oceanic and Atmospheric Administration.Reservists must be placed on active duty to qualify. NationalGuard personnel not serving in a “federalized” status — that is,called to active duty specifically by the president of theUnited States — are not covered.
The deferral applies to taxes that fall due before or duringmilitary service, and extends the payment deadline to six months(180 days) after the military service ends. No interest orpenalty accrues during the deferral period.
(Article continued below)
The deferral is not automatic. A taxpayer must apply for it.When applying, the taxpayer must show how the military serviceaffected the taxpayer's ability to pay. A taxpayer must alsohave received a notice of tax due, or have an installmentagreement with the IRS, before applying for the deferral.
The deferral does not extend the deadline for filing any taxreturns. However, taxpayers in the armed forces may get extratime to file under other provisions, such as being stationedoverseas, in a combat zone or in a qualified hazardous dutyarea, 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 combatzone effective Sept. 19, 2001. 2. The Federal Republic ofYugoslavia (Serbia/Montenegro) 3. Albania 4. Bosnia andHerzegovina 5. Croatia 6. Macedonia 7. The Adriatic Sea 8. TheIonian 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 Seathat is north of 10 degrees north latitude and west of 68degrees east longitude 13. The Gulf of Aden 14. The total landareas of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia andthe 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, effectiveJuly 1, 2002
While deferring back taxes is a helpful notion, a better methodwould be simply to waive all taxes on military personnel.
About the author:Richard Chapo is CEO of Business TaxRecovery - Obtaining tax refunds for smallbusinesses for overpaid taxes. Discovery tax strategies anddeductions in our tax articlessection.
