One Hundred Ninth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the third day of January, two thousand and six
An Act
To amend the Internal Revenue Code of 1986 to allow members of
the Armed Forces serving in a combat zone to make contributions to their
individual retirement plans even if the compensation on which such contribution
is based is excluded from gross income, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Heroes Earned Retirement Opportunities Act'.
SEC. 2. COMBAT ZONE COMPENSATION TAKEN INTO ACCOUNT FOR PURPOSES OF DETERMINING
LIMITATION AND DEDUCTIBILITY OF CONTRIBUTIONS TO INDIVIDUAL RETIREMENT PLANS.
(a) In General- Subsection (f) of section 219 of the Internal Revenue Code
of 1986 is amended by redesignating paragraph (7) as paragraph (8) and by
inserting after paragraph (6) the following new paragraph:
`(7) SPECIAL RULE FOR COMPENSATION EARNED BY MEMBERS OF THE ARMED FORCES
FOR SERVICE IN A COMBAT ZONE- For purposes of subsections (b)(1)(B) and
(c), the amount of compensation includible in an individual's gross income
shall be determined without regard to section 112.'.
(b) Effective Date- The amendments made by this section shall apply to taxable
years beginning after December 31, 2003.
(c) CONTRIBUTIONS FOR TAXABLE YEARS ENDING BEFORE ENACTMENT-
(1) IN GENERAL- In the case of any taxpayer with respect to whom compensation
was excluded from gross income under section 112 of the Internal Revenue
Code of 1986 for any taxable year beginning after December 31, 2003, and
ending before the date of the enactment of this Act, any contribution
to an individual retirement plan made on account of such taxable year
and not later than the last day of the 3-year period beginning on the
date of the enactment of this Act shall be treated, for purposes of such
Code, as having been made on the last day of such taxable year.
(2) WAIVER OF LIMITATIONS-
(A) CREDIT OR REFUND- If the credit or refund of any overpayment of
tax resulting from a contribution to which paragraph (1) applies is
prevented at any time by the operation of any law or rule of law (including
res judicata), such credit or refund may nevertheless be allowed or
made if the claim therefor is filed before the close of the 1-year period
beginning on the date that such contribution is made (determined without
regard to paragraph (1)).
(B) ASSESSMENT OF DEFICIENCY- The period for assessing a deficiency
attributable to a contribution to which paragraph (1) applies shall
not expire before the close of the 3-year period beginning on the date
that such contribution is made. Such deficiency may be assessed before
the expiration of such 3-year period notwithstanding the provisions
of any other law or rule of law which would otherwise prevent such assessment.
(3) INDIVIDUAL RETIREMENT PLAN DEFINED- For purposes of this subsection,
the term `individual retirement plan' has the meaning given such term
by section 7701(a)(37) of such Code.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
END
