108th CONGRESS
1st Session
H. R. 117
To amend the Internal Revenue Code of 1986 to extend to civilian employees
of the Department of Defense serving in combat zones the tax treatment allowed
to members of the Armed Forces serving in combat zones.
IN THE HOUSE OF REPRESENTATIVES
January 7, 2003
Mr. HEFLEY introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to extend to civilian employees
of the Department of Defense serving in combat zones the tax treatment allowed
to members of the Armed Forces serving in combat zones.
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled,
SECTION 1. TAX TREATMENT OF CIVILIAN EMPLOYEES OF DEPARTMENT OF DEFENSE IN
COMBAT ZONES.
(a) EXCLUSION OF COMBAT ZONE COMPENSATION-
(1) IN GENERAL- Subsection (d) of section 112 of the Internal Revenue Code
of 1986 (relating to prisoners of war, etc.) is amended by adding at the end
the following new paragraph:
`(4) CIVILIAN EMPLOYEES OF DEPARTMENT OF DEFENSE-
`(A) SERVICE IN COMBAT ZONE- Gross income does not include so much of the
compensation as does not exceed the maximum enlisted amount received for
active service as a civilian employee of the Department of Defense serving
in support of the Armed Forces of the United States for any month during
any part of which such employee--
`(i) served in a combat zone,
`(ii) was hospitalized as a result of wounds, disease, or injury incurred
while serving in a combat zone, or
`(iii) is in a missing status as a result of such service.
Clause (ii) shall not apply for any month beginning more than 2 years after
the date of the termination of combatant activities in such zone.
`(B) MISSING STATUS- For purposes of this paragraph, the terms `active service'
and `missing status' have the respective meanings given to such terms by
section 5561 of title 5 of the United States Code.'.
(A) The heading for section 112 of such Code is amended to read as follows:
`SEC. 112. CERTAIN COMBAT ZONE COMPENSATION.'.
(B) The item relating to section 112 in the table of sections for part III
of subchapter B of chapter 1 of such Code is amended to read as follows:
`Sec. 112. Certain combat zone compensation.'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to
taxable years beginning after December 31, 2002.
(b) ADDITIONAL ESTATE TAX NOT TO APPLY-
(1) IN GENERAL- Subsection (b) of section 2201 of such Code is amended by
inserting `or while in service as a civilian employee of the Department of
Defense serving in support of the Armed Forces of the United States,' after
`United States,'.
(A) The heading for section 2201 of such Code is amended by inserting `and
department of defense civilians' after `members of the armed forces'.
(B) The item relating to section 2201 in the table of sections for subchapter
C of chapter 11 of such Code is amended to read as follows:
`Sec. 2201. Members of the Armed Forces and Department of Defense civilians
dying in combat zone or by reason of combat-zone-incurred wounds, etc.'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to
decedents dying after December 31, 2002.
(c) NO TAX ON TOLL TELEPHONE SERVICE IN COMBAT ZONE-
(1) IN GENERAL- Subsection (d) of section 4253 of such Code (relating to servicemen
in combat zone) is amended by inserting `, or from a civilian employee of
the Department of Defense,' after `United States'.
(2) EFFECTIVE DATE- The amendment made by this subsection shall apply with
respect to amounts paid after the date of the enactment of this Act for services
rendered on or after such date.
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