Combat-Injured Veterans Tax Fairness Act of 2016

Floor Speech

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Mr. NEAL. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I thank Chairman Brady for his efforts on behalf of this legislation.

This is a pleasant responsibility that we have when you consider that its corrective action will alone help 175 former military members in the State of Massachusetts and 13,800 across the country.

Let me reiterate some of the points that were made by Chairman Brady. The bill before us corrects an issue related to a provision that was designed to alleviate some of the tax burdens of our Nation's combat- injured veterans. Under Federal law, veterans who suffer combat-related injuries and who are separated from the military are not supposed to be taxed on the one-time lump-sum disability severance payment they receive from the Department of Defense.

Due to an accounting error at the Defense Finance and Accounting Service, approximately $78 million in tax payments were inadvertently taken from combat-disabled servicemembers. Some of this improper withholding has taken place outside the 3-year period in which taxpayers could file an amended tax return.

H.R. 5015 would right this wrong by instructing DOD to identify those who were wrongfully taxed so that they can be reimbursed. This bill would allow those veterans identified by the DOD to file amended returns to recoup those unintentionally withheld funds.

Mr. Speaker, I am curious with respect to two items in this bill, and I just would like to raise this ever so politely with the majority party. Veterans' issues in the Congress have long had a bipartisan flavor to them. We have been supportive across the board in the efforts that we make as it relates to our veterans, and the differences we have generally are very small; but in this case, it does not appear that a Democrat was asked to cosponsor the bill in its original introduction. So I would hope in the future that even though this bill was largely sponsored by Republican Members, that on this side you could have easily picked up 33 Members as well.

So I hope going forward there will be that effort that we would continue with here to ensure that matters of this magnitude are well met by both parties. I would say that I don't want to suggest for a moment that this was done in a partisan atmosphere as much as I would like to think that it was just overlooked. I hope in the future that we would be considered for sponsorship of this sort of legislation as well.

Also, I would like to highlight an issue that is akin to the matter that is before us, and it comes from our friends on the committee, Sam Johnson and John Larson. They worked together on legislation that would prevent exonerated felons from facing an undue tax burden with respect to payments they received due to their wrongful conviction--emphasis on ``wrongful conviction.''

Similar to the veterans in the situation before us, these wrongfully convicted individuals should not face an improper tax liability on amounts intended to compensate for the tremendous injustices they faced under our legal system. Legislation to that effect became law in 2015. However, due to the lengthy IRS process in providing guidance on the issue, the statute would only allow less than 5 months for these exonerated individuals to amend their prior year tax returns.

Mr. Johnson and Mr. Larson of Connecticut have worked tirelessly to make sure that these individuals are not unfairly burdened further than they already have been and they have proposed extending the statutory deadline for these individuals to file amended returns.

So while I think the legislation before us is sound, I do hope that the committee and the Congress will find time to consider similar IRS filing-deadline legislation with respect to these exonerated individuals.

Mr. Speaker, I reserve the balance of my time.

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