Reservists called to active duty and enlistees in the armed forces may qualify for a deferral of taxes owed if they can show that their ability to pay taxes was affected by their military service.
The deferral covers active duty members of the military services - Army, Navy, Air Force, Marine Corps and Coast Guard - and commissioned officers of the uniformed services - Public Health Service and the National Oceanic and Atmospheric Administration. Reservists must be placed on active duty to qualify. National Guard personnel not serving in a "federalized" status - that is, called to active duty specifically by the president of the United States - are not covered.
The deferral applies to taxes that fall due before or during military service, and extends the payment deadline to six months (180 days) after the military service ends. No interest or penalty accrues during the deferral period.
The deferral is not automatic. A taxpayer must apply for it. When applying, the taxpayer must show how the military service affected the taxpayer's ability to pay. A taxpayer must also have received a notice of tax due, or have an installment agreement with the IRS, before applying for the deferral.
The deferral does not extend the deadline for filing any tax returns. However, taxpayers in the armed forces may get extra time to file under other provisions, such as being stationed overseas, in a combat zone or in a qualified hazardous duty area, or if they are serving in direct support of a combat zone.
Combat Areas
The following areas of have been designated as combat areas.
1. Afghanistan and the airspace above was designated a combat zone effective Sept. 19, 2001.
2. The Federal Republic of Yugoslavia (Serbia/Montenegro)
3. Albania
4. Bosnia and Herzegovina
5. Croatia
6. Macedonia
7. The Adriatic Sea
8. The Ionian Sea - north of the 39th parallel
9. The Persian Gulf
10. The Red Sea
11. The Gulf of Oman
12. The part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude
13. The Gulf of Aden
14. The total land areas of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates
15. Incerlik Air Base in Turkey
16. Pakistan, Tajikistan and Jordan
17. Uzbekistan and Kyrgyzstan
18. The Philippines
19. Yemen
20. Djibouti
While deferring back taxes is a helpful notion, a better method would be simply to waive all taxes on military personnel.
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
An early distribution from an Individual Retirement Arrangement (IRA) or... Read More
The Internal Revenue Service is reporting that the difference between... Read More
Most people look forward to getting their tax return, but... Read More
Newlyweds and the recently divorced should make sure that names... Read More
If you have recently started an Internet or home business,... Read More
Over 50% of marriages end in divorce in the United... Read More
The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More
Are you in the middle of a disagreement with the... Read More
In the largest criminal tax case ever filed, KMPG has... Read More
In the rush to get tax returns prepared and filed... Read More
Let's assume that you would like to begin saving for... Read More
Tilting the Tax Laws in Your Favor.In order to accelerate... Read More
Marketing is a necessary expense in running practically any business... Read More
Managing a business small, medium or big requires you to... Read More
The 100 year old investment-banking firm of... Read More
OverviewIn the Pre-Budget Report of December 2003 the Chancellor Gordon... Read More
Your days as an entrepreneur and businessperson are consumed with... Read More
As tax time approaches, many home-based business owners begin completing... Read More
Taxpayers have two easy and convenient options for getting copies... Read More
If you are environmentally conscious and purchase a 2005 Ford... Read More
In elementary school, kids come up with creative excuses why... Read More
Ever wish that, as a business owner, you knew exactly... Read More
As your business grows, you are going to need help.... Read More
A Federal Tax Lien (FTL) is a legal instrument that... Read More
Haven't done your taxes yet? No problem. Now there is... Read More
Background issues of access to recordsTo assess the records at... Read More
No one likes paying tax. Everyone understands that tax is... Read More
Deduction of Refinance PointsAny points that you pay in the... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More
Someone once remarked, "Next to being shot at and missed,... Read More
Does this scene sound familiar? It's April 7. You haven't... Read More
The Sarbanes-Oxley Act, also called the Public Company Accounting Reform... Read More
A Federal Tax Lien (FTL) is a legal instrument that... Read More
You've been feeling uneasy (perhaps even guilty) because you've failed... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
If you are a Small Business Owner or Self-Employed Person,... Read More
As a gentleman was leaving my class recently, he wanted... Read More
Q: I was contacted by the city tax collector to... Read More
It's that time again, the April 15 tax deadline is... Read More
If your identity is stolen, your finances can quickly become... Read More
The end of tax filing extensions is quickly approaching. What... Read More
The Internal Revenue Service is reporting that the difference between... Read More
Are you in the middle of a disagreement with the... Read More
Over 50% of marriages end in divorce in the United... Read More
Yes, the tax season is upon with the first filing... Read More
All states also have their own tax system. Typically there... Read More
While there are many equally valid reasons to incorporate, saving... Read More
Many Americans believe that an IRS debt is a debt... Read More
If you have recently started an Internet or home business,... Read More
When buying a business, how the "purchase price" is made... Read More
Choosing the right tax preparer for your business is a... Read More
Have you been thinking about incorporating your small business or... Read More
The powers of Congress, and the limitations set upon those... Read More
If you are environmentally conscious and purchase a 2005 Ford... Read More
The means and types of businesses have transformed with advent... Read More
Most people look forward to getting their tax return, but... Read More
Do you realize that some tax forms ask you to... Read More
At the present time a company incorporated in the Isle... Read More
Each year, the IRS lists various scams taxpayers get caught... Read More
With gas prices at an all time high before Hurricane... Read More
All tax authorities to e-commerce transactions should investigate the record... Read More
Following is a reproduction of the IRS's rules and requirements... Read More
You're at your office, or home, and the doorbell rings... Read More
With the massive losses caused by Katrina, the economy of... Read More
Background issues of access to recordsTo assess the records at... Read More
Tax |