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Legislation Brings Tax Relief to Terror Victims' Families

By Gerry J. Gilmore
American Forces Press Service

WASHINGTON, Feb. 8, 2002 – Legislation signed last month by President Bush provides a guaranteed $10,000 minimum of federal tax relief to families of all victims of the Sept. 11 terror attacks in the United States.

The president signed the Victims of Terrorism Relief Act of 2001 on Jan. 23. The law provides victims' families relief from paying federal income taxes the year the family member was killed and the previous year, said Army Lt. Col. Thomas K. Emswiler, executive director of the Armed Forces Tax Council. The law, he remarked, received bipartisan support.

The $10,000 guaranteed refund is a special one-time provision in the law for victims of the Sept. 11 attacks and subsequent anthrax attacks, and also the 1995 Murrah Federal Building bombing in Oklahoma City, Okla.

"So even if the individual didn't pay any income tax in those two years, the individual's family would receive $10,000. If the individual paid $3,000 in taxes, they'd get the $3,000 back and an additional $7,000," Emswiler said. "If the individual had paid, say, $20,000 in income tax, then his or her family would get the full $20,000 back."

"The act ... recognizes that terrorism can be a domestic event, too," he said. Tax forgiveness policies have been in place for some years for military members and federal civilian employees killed in terrorist attacks overseas. The new law covers all taxpayers and also domestic attacks.

Emswiler noted that "all federal income taxes," other than amounts attributable to retirement plans or IRAs, would be repaid to families of terror attack victims during the specified periods of the law.

The legislation includes a host of other provisions, he added, such as exempting victims' families from paying federal tax on most disaster relief benefits paid to them as a result of the Sept. 11 attacks. Disaster relief exemptions will also apply to "any future disaster ... be it a presidentially declared disaster such as a hurricane, or God forbid, another terrorist attack," he said.

For more information about the law, he suggested calling the Internal Revenue Service's toll-free number, 1-866-562- 5227, or visiting the IRS Web site at www.irs.gov.

The law for military members is covered in the 2001 Armed Forces Tax Guide, IRS Publication 3, at www.irs.gov/pub/irs- pdf/p3.pdf. The document requires the Adobe Acrobat Reader to view.

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