Military Reservists, Enlistees May Get Deferral of Back Taxes

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.

In The News:

pen paper and inkwell


cat break through


10 Thoughts on Tax Offer in Compromise

Beware of advertisements that claim to settle tax debts for... Read More

Identity Theft ? Impacting Your Taxes?

If your identity is stolen, your finances can quickly become... Read More

Small Business Tax Credit - Americans with Disabilities Act

Many small businesses complain when confronted with the expense of... Read More

Take Control of Your Taxes

As everyone in the U.S. knows, we have just passed... Read More

Small Business Tax Issues for Self-Employed Individuals

The United States is a nation of entrepreneurs. There are... Read More

Tax Help Secret: Avoiding the Entreprenuers Curse

Your days as an entrepreneur and businessperson are consumed with... Read More

Render Unto Caesar

Once a year Canadian taxpayers are required, by law, to... Read More

How To Get An Extension To File Your Business Tax Returns

Yes, the tax season is upon with the first filing... Read More

The Tax Man Cometh... To Search

You're at your office, or home, and the doorbell rings... Read More

Save Money on Taxes - Double Your Income Now With Tax Saving Tips on Deductions

Adding Your First Additional Stream of IncomeMost new wealth builders... Read More

Business Tax Loophole: Leasing Assets To Your Corporation

While there are many equally valid reasons to incorporate, saving... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

Tax Tips for Home-Based Business Owners

As tax time approaches, many home-based business owners begin completing... Read More

State Tax Information

All states also have their own tax system. Typically there... Read More

Know A Tax Cheat? Get Paid To Tell The IRS

According to the IRS, taxpayers underpay their taxes by some... Read More

Paying Workers ? What Can You Write-Off?

As your business grows, you are going to need help.... Read More

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed,... Read More

The Seven Deadly Tax Sins: Commonly Missed Deductions

It's that time again, the April 15 tax deadline is... Read More

Tax Trap #4 -- The Quagmire of Depreciation

If you are a Small Business Owner or Self-Employed Person,... Read More

How to Maximize Your Home Business Tax Deductions for 2005

Someone once said, 'the best way to calculate your taxes... Read More

Another Tax Loophole

Just image, you are a small manufacturing company, business has... Read More

Correspondence From The IRS ? Yikes!

It's a moment every person dreads. You pick up the... Read More

Understanding Basic Tax Terms

If your like many, you don't always understand what people... Read More

Business Tax Deductions

As we enter mid-March, taxpayers begin to become very interested... Read More

Seven Key Tax Deductions for the Self Employed

As a sole proprietor, it's wise to familiarize yourself with... Read More

What to Do If You Can?t Pay Your Taxes

The end of tax filing extensions is quickly approaching. What... Read More

How to Cut Duty Cost and Increase Profit as an Importer

Import duties continue to be significant elements in the cost... Read More

Tax Jokes and Quotes

Do you realize that some tax forms ask you to... Read More

Requirements To Produce Tax Information (Whats Up With That?)

"What we've got here is a failure to communicate." ... Read More

Need an Offshore Sales Office in a Tax Free Environment?

The 100 year old investment-banking firm of... Read More

Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make

NOTE: This is the first in a series of 5... Read More

The Internet Tax Man Cometh

Q: I was contacted by the city tax collector to... Read More

2005 Ford Escape Hybrid Certified For Clean-Fuel Deduction

If you are environmentally conscious and purchase a 2005 Ford... Read More