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DoD Tells Service Members 'Don't Worry' About Scary IRS Mistake

By Sgt. 1st Class Kathleen T. Rhem, USA
American Forces Press Service

WASHINGTON, Jan. 18, 2002 – As many as 60,000 service members who served in combat zones over the past several years recently got letters from the IRS saying they may lose their tax exclusion for that combat-zone duty. But DoD is telling the troops not to worry about it.

The IRS letters set response deadlines on service members - - as soon as Jan. 25 in some cases -- or their combat zone tax exemption will be denied. By the deadline, the letters say, service members must provide the IRS with the dates they entered and left the designated combat zone and exactly in which zone they served.

DoD officials were concerned because the letters stated, "If you don't answer this letter, we will update your account to show no combat zone service."

Army Lt. Col. Tom Emswiler, executive director of the Armed Forces Tax Council, said the IRS never intended to take away anyone's eligibility for tax exemption. Apparently an IRS service center sent the letters without coordinating with IRS headquarters, DoD officials said.

Emswiler said the IRS is trying to update their records, but made a mistake in wording the letters so strongly. He said there's no problem if service members have already replied to the faulty letters, but those who haven't can disregard them. He said the IRS plans to mail a second letter explaining the error and telling service members to ignore the first letter.

Emswiler said DoD has a good working relationship with the IRS and had no problem getting this matter resolved. "The IRS doesn't want to take adverse action against any service member," he said. "The letter was unfortunate all around, but they're doing everything they can to correct it."


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