The following was prepared for the readers of Armed Forces News by Kathleen M. LaPlume of the Internal Revenue Service.
Publication 3 – ARMED FORCES’ TAX GUIDE
For use in preparing 2006 Returns
Publication 3 covers special tax situations of active members of the US Armed Forces. Members serving in an area designated or treated as a combat zone are granted special tax benefits.
In the unfortunate event a member of the U. S. Armed Forces dies while in active service in a combat zone or from wounds, disease, or other injury received in a combat zone, the decedent’s income tax liability is forgiven for the tax year in which death occurred and for any earlier tax year ending on or after the first day the member served in a combat zone in active service. Any forgiven tax liability that has already been paid will be refunded, and any unpaid tax liability at the date of death will be forgiven.
The death gratuity paid to a spouse or a family member of the US Armed Forces who died after September 10, 2001, is $200,000. The full amount is nontaxable.
If you would like a copy of Publication 3, Armed Forces’ Tax Guide for use in preparing 2006 returns, please go to the IRS web site @ www.irs.gov to print a copy. Click on Forms and Publications on the left. Go to Download forms and publications by: Click on Publication Number. Scroll down to select Publication 3, click on Retrieve Selected Files.
When mailing a tax return for a service member killed in action, please address it as follows: Internal Revenue Service Accounts Management Office 310 Lowell Street Stop 661 Andover, MA 01812
Please write “Iraqi Freedom or Enduring Freedom – K.I.A.” on top of the return in red.
If you would like further information regarding this article, please contact
Judith Powers,
National Killed in Terrorist Action/Killed in Action (KITA/KIA) Program Manager,
at (978) 474-5408 between the hours of 8:00AM and 4:30PM EDT.
Sincerely,
Kathleen M. LaPlume
Internal Revenue Service
Accounts Management, Planning & Analysis Office
Killed In Terrorist Action/Killed In Action Office
310 Lowell Street, Stop 708
Andover, Massachusetts 01812
Telephone (978) 474-5408
Fax (978) 474-5953
Kathleen.M.LaPlume@irs.gov