A bipartisan bill introduced Tuesday would offer greater income tax forgiveness for service members who die as a result of injury or disease incurred in a combat zone.
The Fallen Heroes Tax Fairness Act of 2006, sponsored by Reps. Robert Ney, R-Ohio, and Michael McNulty, D-N.Y., is simply an attempt to provide the same tax exemptions for combat-related deaths that apply to civilians who die in terrorist acts, the two said in a joint statement.
“Our fallen soldiers should be treated like the American heroes that they are and not like the second-class citizens that the IRS tax code currently treats them as,” Ney said. “This is an outrageous discrepancy that must be corrected immediately.”
“The families of American soldiers killed in action face challenges beyond mourning the loss of their loved one,” added McNulty. “Often, they experience economic turmoil due to lost income and unexpected financial costs.”
The bill, HR 5032, would provide a two-year tax exemption for service members killed in combat or of combat-related causes, the same exemption provided to civilians who are victims of terrorist attacks.
The Internal Revenue Code includes a section granting certain civilians an automatic income tax exemption for two years, the year of death and the year prior to death. This rule, created for those who die in terrorist attacks, has been applied to civilians killed in Iraq.
However, a U.S. service member killed in combat does not receive the same automatic income tax exemption; only their pay while in the war zone is considered tax-free.
“This unfair treatment of America’s heroes should not be allowed to continue any longer,” Ney said.
“This is simply a case of doing the right thing,” said McNulty, a member of the House Ways and Means Committee, where all tax-related legislation originates.