Special Tax Relief for
Troops in Bosnia and Their Spouses!

WASHINGTON - The Internal Revenue Service today announced special tax relief under recently enacted legislation for U.S. military and support personnel involved in the peace-keeping efforts in the former Republic of Yugoslavia (Bosnia and Herzegovina, Croatia, and Macedonia).

Members of the U.S. Armed Forces and support personnel serving in these peace-keeping efforts will not have to file their 1995 individual income tax returns until at least 180 days after they depart from that area. No interest or penalties will be charged during this period on any tax due for 1995.

The IRS will also suspend all tax return examinations and actions to collect any back taxes owed by these taxpayers for years prior to 1995 until at least 180 days after the taxpayer leaves the peace-keeping area. During this time no interest or penalties will be added to the tax due.

These relief provisions apply not only to members of the Armed Forces and support personnel participating in these peace-keeping efforts, but also to their spouses.

Military pay received by enlisted personnel while serving in these peace-keeping efforts is exempt from federal income tax.

For commissioned officers, the new law excludes up to the "maximum enlisted amount" per month, currently $4,104.80 plus certain special pay. This amount was $500 per month under prior law.

The new legislation is generally effective on November 21, 1995. Under it, the additional time for filing and paying taxes is also applicable to U.S. military personnel performing support services in areas outside the United States and away from their permanent duty station as part of the peace-keeping efforts in Bosnia and Herzegovina, and Croatia.

Taxpayers, spouses and others acting on behalf of a taxpayer involved in these peace-keeping efforts may call the IRS toll-free number, 1-800-825-1040, for any additional information. The IRS offices in Rome and Bonn are also available for assistance. Contact the Rome office by calling [39] (6) 4674-2560, or via fax at [39] (6) 4674-2223, and the Bonn office by calling [49] (228) 339-2119, or via fax at [49] (228) 339-2810. Military members serving in these peace-keeping efforts that have access to E-mail may address questions to [email protected]. Those who receive correspondence about any collection or examination matter covered by these tax relief provisions should contact the IRS immediately so that IRS can suspend the action.

IRS expects to issue additional guidance in the near future that will further explain the tax relief provided under the new law.

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