IRS provides combat zone tax assistance Published April 8, 2003 WASHINGTON (AFPN) -- Servicemembers serving in a combat zone can learn about the tax benefits available to them by logging onto a new section of the Internal Revenue Service's Web site.The information is available on the front page of www.irs.gov by clicking on "Armed Forces Tax Benefits."The new Web section provides questions and answers on exclusions, extensions and other tax benefits available to members of the armed forces serving in a combat zone. Also available on the Web is IRS Publication 3, Armed Forces' Tax Guide, which covers the special tax situations of members of the armed forces serving on active duty.Other helps include recent news releases and notices, including Tax Tip 2003-41 -- Reservists, New Enlistees May Get Deferral for Back Taxes; News Release IR-2002-18 -- Tax Relief for Troops in Afghanistan Combat Zone; and Notice 2002-17 -- Tax Relief for those Involved in Operation Enduring Freedom.The Web site also offers a special e-mail address for servicemembers, their spouses, authorized agents or representatives, which can be used to notify the IRS about someone serving in a combat zone."At this important time, our dedicated military personnel in combat zones should not be worried about tax issues," said IRS Acting Commissioner Bob Wenzel. "We want each of them to receive all of the tax benefits they are entitled to. We want all of our servicemen and servicewomen, and their families, to know that we are here to help."Enlisted people serving in a combat zone or qualified hazardous duty area can exclude the following:-- Active-duty pay earned in any month served in a combat zone.-- Imminent danger/hostile fire pay and military pay earned while hospitalized as a result of wounds, disease or injury incurred in the combat zone.-- A re-enlistment bonus if the voluntary extension or re-enlistment occurs in a month served in combat zone.-- Pay for accrued leave earned in any month served in combat zone. (The Department of Defense must determine that the unused leave was earned during that period.)-- Pay received for duties as a servicemember in clubs, messes, post and station theaters and other non-appropriated fund activities earned during a month served in a combat zone.-- Awards received for suggestions, inventions or scientific achievements made during a month in a combat zone.Commissioned officers may exclude pay according to the rules above, but the amount of the exclusion is limited to the highest rate of enlisted pay (plus imminent danger/hostile fire pay received) for each month during any part of which they served in a combat zone. For 2002, this limit was $5,532.90 and for 2003, it is $5,882.70.The IRS automatically extends the deadline for filing tax returns, paying taxes, filing claims for refund and taking other actions related to federal income tax for military people serving in a combat zone. The IRS also extends the deadline for those deployed overseas away from their permanent-duty station in support of operations in a qualified hazardous duty area but who are outside that area.The deadline for filing returns, making payments or taking any other action with the IRS is extended for at least 180 days after the last day of qualifying combat zone service or the last day of any continuous qualified hospitalization for injury from service in the combat zone.IRS officials said they are working with the Department of Defense to obtain information about reservists and regular military personnel serving in combat areas.During this interim period, people in the military, their spouses or their authorized representatives have two options to claim the filing extensions or filing exclusions. When filing returns, they can mark "Combat Zone" at the top of the form along with the date of deployment or contact the IRS through the special e-mail address given on its Web site. Correspondence should include the name, date of birth, and date of deployment of the servicemember. (No Social Security numbers should be included in the e-mail.) The IRS emphasizes only military-related e-mails should go to this address. Calls can also be made to the main IRS help line at (800) 829-1040.These two steps also apply if a notice inadvertently goes to an individual serving in a combat zone or his or her spouse. The notice can be deferred by following the e-mail steps or by sending the notice back to the IRS marked with the words "Combat Zone" and the date of deployment.The IRS plans to take additional steps and provide additional guidance on issues involving military people and combat zones. This new information will also be posted to the armed forces page of the Web site.A combat zone is any area the president designates by executive order as an area in which the U.S. armed forces are engaging or have engaged in combat. Usually, an area becomes a combat zone and ceases to be a combat zone on the dates designated by executive order.The following locations were designated as combat zones beginning on the dates indicated:Jan. 17, 1991 - The Persian Gulf area including airspace over the Persian Gulf, the Red Sea, the Gulf of Oman, the part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude, the Gulf of Aden and the total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar and the United Arab Emirates.March 24, 1999 - Kosovo including the Federal Republic of Yugoslavia (Serbia and Montenegro), Albania, the Adriatic Sea and the Ionian Sea north of the 39th parallel.Sept. 19, 2001 - Afghanistan. Public Law 104-117 designated three parts of the former Yugoslavia -- Bosnia-Herzegovina, Croatia and Macedonia -- as a qualified hazardous duty area, to be treated as if it were a combat zone, beginning Nov. 21, 1995.In addition, DOD has certified the following locations for combat zone tax benefits due to their direct support of military operations in the Afghanistan combat zone (Operation Enduring Freedom), beginning on the listed dates:Sept. 19, 2001 -- Pakistan, Tajikistan and Jordan.Sept. 21, 2001 -- Incirlik Air Base, Turkey.Oct. 1, 2001 -- Kyrgyzstan and Uzbekistan.Jan. 9, 2002 - Philippines.April 10, 2002 - Yemen,July 1, 2002 -- Djibouti. (Courtesy of Air Force Reserve Command News Service from an IRS news release)