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Internal Revenue Code, § 692. Income Taxes Of Members Of Armed Forces, Astronauts, And Victims Of Certain Terrorist Attacks On Death

I.R.C. § 692(a) General Rule
In the case of any individual who dies while in active service as a member of the Armed Forces of the United States, if such death occurred while serving in a combat zone (as determined under section 112) or as a result of wounds, disease, or injury incurred while so serving—
I.R.C. § 692(a)(1)
any tax imposed by this subtitle shall not apply with respect to the taxable year in which falls the date of his death, or with respect to any prior taxable year ending on or after the first day he so served in a combat zone; and
I.R.C. § 692(a)(2)
any tax under this subtitle and under the corresponding provisions of prior revenue laws for taxable years preceding those specified in paragraph (1) which is unpaid at the date of his death (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
I.R.C. § 692(b) Individuals In Missing Status
For purposes of this section, in the case of an individual who was in a missing status within the meaning of section 6013(f)(3)(A), the date of his death shall be treated as being not earlier than the date on which a determination of his death is made under section 556 of title 37 of the United States Code. Except in the case of the combat zone designated for purposes of the Vietnam conflict, the preceding sentence shall not cause subsection (a)(1) to apply for any taxable year beginning more than 2 years after the date designated under section 112 as the date of termination of combatant activities in a combat zone.
I.R.C. § 692(c) Certain Military Or Civilian Employees Of The United States Dying As A Result Of Injuries
I.R.C. § 692(c)(1) In General
In the case of any individual who dies while a military or civilian employee of the United States, if such death occurs as a result of wounds or injury which was incurred while the individual was a military or civilian employee of the United States and which was incurred in a terroristic or military action, any tax imposed by this subtitle shall not apply—
I.R.C. § 692(c)(1)(A)
with respect to the taxable year in which falls the date of his death, and
I.R.C. § 692(c)(1)(B)
with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds or injury were incurred.
I.R.C. § 692(c)(2) Terroristic Or Military Action
For purposes of paragraph (1), the term “terroristic or military action” means—
I.R.C. § 692(c)(2)(A)
any terroristic activity which a preponderance of the evidence indicates was directed against the United States or any of its allies, and
I.R.C. § 692(c)(2)(B)
any military action involving the Armed Forces of the United States and resulting from violence or aggression against the United States or any of its allies (or threat thereof).
For purposes of the preceding sentence, the term “military action” does not include training exercises.
I.R.C. § 692(c)(3) Treatment Of Multinational Forces
For purposes of paragraph (2), any multinational force in which the United States is participating shall be treated as an ally of the United States.
I.R.C. § 692(d) Individuals Dying As A Result Of Certain Attacks
I.R.C. § 692(d)(1) In General
In the case of a specified terrorist victim, any tax imposed by this chapter shall not apply—
I.R.C. § 692(d)(1)(A)
with respect to the taxable year in which falls the date of death, and
I.R.C. § 692(d)(1)(B)
with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds, injury, or illness referred to in paragraph (3) were incurred.
I.R.C. § 692(d)(2) $10,000 Minimum Benefit
If, but for this paragraph, the amount of tax not imposed by paragraph (1) with respect to a specified terrorist victim is less than $10,000, then such victim shall be treated as having made a payment against the tax imposed by this chapter for such victim's last taxable year in an amount equal to the excess of $10,000 over the amount of tax not so imposed.
I.R.C. § 692(d)(3) Taxation Of Certain Benefits
Subject to such rules as the Secretary may prescribe, paragraph (1) shall not apply to the amount of any tax imposed by this chapter which would be computed by only taking into account the items of income, gain, or other amounts attributable to—
I.R.C. § 692(d)(3)(A)
deferred compensation which would have been payable after death if the individual had died other than as a specified terrorist victim, or
I.R.C. § 692(d)(3)(B)
amounts payable in the taxable year which would not have been payable in such taxable year but for an action taken after September 11, 2001.
I.R.C. § 692(d)(4) Specified Terrorist Victim
For purposes of this subsection, the term “specified terrorist victim” means any decedent—
I.R.C. § 692(d)(4)(A)
who dies as a result of wounds or injury incurred as a result of the terrorist attacks against the United States on April 19, 1995, or September 11, 2001, or
I.R.C. § 692(d)(4)(B)
who dies as a result of illness incurred as a result of an attack involving anthrax occurring on or after September 11, 2001, and before January 1, 2002.
Such term shall not include any individual identified by the Attorney General to have been a participant or conspirator in any such attack or a representative of such an individual.
I.R.C. § 692(d)(5) Relief With Respect To Astronauts
The provisions of this subsection shall apply to any astronaut whose death occurs in the line of duty, except that paragraph (3)(B) shall be applied by using the date of the death of the astronaut rather than September 11, 2001.
(Aug. 16, 1954, ch. 736, 68A Stat. 238; Jan. 2, 1975, Pub. L. 93-597, 4(a), 88 Stat. 1952; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1901(a)(92), 90 Stat. 1780; Oct. 20, 1976, Pub. L. 94-569, 3(c), 90 Stat. 2699; Jan. 12, 1983, Pub. L. 97-448, title III, 307(b), 96 Stat. 2407; Apr. 10, 1984, Pub. L. 98-259, 1(a), 98 Stat. 142; July 18, 1984, Pub. L. 98-369, div. A, title VII, 722(g)(2), (3), 98 Stat. 974; Oct. 22, 1986, Pub. L. 99-514, title XVII, 1708(a)(2), 100 Stat. 2782; Jan. 23, 2002, Pub. L. 107-134, title I, sec. 101, 113, 115 Stat. 2427; Nov. 11, 2003, Pub. L. 108-121, title I, Sec. 110(a), 117 Stat. 1335; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(67), Dec. 19, 2014, 128 Stat. 4010.)
BACKGROUND NOTES
AMENDMENTS
2014—Subsec. (a)(1). Pub. L. 113-295, Div. A, Sec. 221(a)(67), amended par. (1) by striking “ after June 24, 1950”.
2003—Sec. 692. Pub. L. 108-121 amended the heading of Sec. 692 by inserting “, astronauts,” after “Forces”.
Subsec. (d)(5). Pub. L. 108-121 amended subsec. (d) by adding par. (5).
2002—Sec. 692. Pub. L. 107-134 amended the heading of Sec. 692. Prior to amendment, it read as follows: “Income taxes on members of Armed Forces on death”.
Subsec. (c). Pub. L. 107-134 amended the heading of subsec. (c) by striking “Sustained Overseas” at the end.
Subsec. (c)(1). Pub. L. 107-134 amended par. (1) by striking “outside the United States” after “and which was incurred”.
Subsec. (d). Pub. L. 107-134 added new subsec. (d).
1986--Subsec. (b). Pub. L. 99-514 amended last sentence generally. Prior to amendment, sentence read as follows: “The preceding sentence shall not cause subsection (a)(1) to apply for any taxable year beginning--
“(1) after December 31, 1982, in the case of service in the combat zone designated for purposes of the Vietnam conflict, or
“(2) more than 2 years after the date designated under section 112 as the date of termination of combatant activities in that zone, in the case of any combat zone other than that referred to in paragraph (1).”
1984--Subsec. (c). Pub. L. 98-259 added subsec. (c).
Subsec. (c)(1). Pub. L. 98-369, 722(g)(2), which directed amendment of par. (1) of this section by substituting “as a result of wounds or injury which was incurred while the individual was a military or civilian employee of the United States and which was incurred” for “as a result of wounds or injury incurred” was executed to par. (1) of subsec. (c) to reflect the probable intent of Congress.
Subsec. (c)(2)(A). Pub. L. 98-369, 722(g)(3), inserted “which a preponderance of the evidence indicates was”.
1983--Subsec. (b)(1). Pub. L. 97-448 substituted “December 31, 1982” for “January 2, 1978”.
1976--Subsec. (b). Pub. L. 94-569 substituted “to apply for any taxable year beginning” for “to apply for any taxable year beginning more than 2 years after” in provisions preceding par. (1), substituted “after January 2, 1978” for “the date of enactment of this subsection” in par. (1), and substituted “more than 2 years after the date designated” for “the date designated” in par. (2).
Pub. L. 94-455 substituted “of members” for “on members” in heading.
1975--Subsec. (a). Pub. L. 93-597, 4(a)(1), (2), designated existing provisions as subsec. (a), added heading, and in subsec. (a) as so designated, struck out “during an induction period (as defined in section 112(c)(5))”, respectively.
Subsec. (b). Pub. L. 93-597, 4(a)(3), added subsec. (b).
EFFECTIVE DATE OF 2014 AMENDMENT
Amendment by Pub. L. 113-295, Div. A, Sec. 221(a)(67), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].
EFFECTIVE DATE OF 2003 AMENDMENTS
Amendments by Pub. L. 108-121, Sec. 110(a), applicable with respect to any astronaut whose death occurs after December 31, 2002.
EFFECTIVE DATE OF 2002 AMENDMENTS
Amendments by Pub. L. 107-134, Sec. 101, applicable to taxable years ending before, on, or after September 11, 2001. Sec. 101(d)(2) provided that:
“(2) WAIVER OF LIMITATIONS- If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [enacted: Jan. 23, 2002] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.”
Amendments by Pub. L. 107-134, Sec. 113, applicable to taxable years ending on or after September 11, 2001.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1982, see section 1708(b) of Pub. L. 99-514, set out as a note under section 2 of this title.
EFFECTIVE DATE OF 1984 AMENDMENTS
Section 722(g)(5) of Pub. L. 98-369, as amended by Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(A) In general.--The amendments made by this subsection [amending this section and enacting and amending provisions set out as notes under this section] shall take effect as if they were included in the amendments made by section 1 of Public Law 98-259 [amending this section and enacting provisions set out as a note under this section].
“(B) Statute of limitations waived.--Notwithstanding section 6511 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the time for filing a claim for credit or refund of any overpayment of tax resulting from the amendments made by this subsection shall not expire before the date 1 year after the date of the enactment of this Act [July 18, 1984].”
Section 1(b) of Pub. L. 98-259 as amended by Pub. L. 98-369, div. A, title VII, 722(g)(1), July 18, 1984, 98 Stat. 974; Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(1) In general.--The amendment made by subsection (a) [amending this section] shall apply with respect to all taxable years (whether beginning before, on, or after the date of enactment of this Act [Apr. 10, 1984]) of individuals dying after November 17, 1978, as a result of wounds or injuries incurred after such date.
“(2) Statute of limitations waived.--Notwithstanding section 6511 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the time for filing a claim for credit or refund of any overpayment of tax resulting from the amendment made by subsection (a) shall not expire before the date 1 year after the date of the enactment of this Act.”
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.
EFFECTIVE DATE OF 1975 AMENDMENT
Section 4(b) of Pub. L. 93-597 provided that: “The amendments made by subsection (a) [amending this section] shall apply to taxable years ending on or after February 28, 1961.”
TREATMENT OF CERTAIN INDIVIDUALS PERFORMING SERVICES IN THE SINAI PENINSULA OF EGYPT
Section 11026 of Pub. L. 115-97 provided that:
“(a) IN GENERAL.—For purposes of the following provisions of the Internal Revenue Code of 1986, with respect to the applicable period, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under section 112 of such Code):
* * *
“(3) Section 692 (relating to income taxes of members of Armed Forces on death).
* * *
“(b) QUALIFIED HAZARDOUS DUTY AREA.—For purposes of this section, the term ‘‘qualified hazardous duty area’’ means the Sinai Peninsula of Egypt, if as of the date of the enactment of this section any member of the Armed Forces of the United States is entitled to special pay under section 310 of title 37, United States Code (relating to special pay; duty subject to hostile fire or imminent danger), for services performed in such location. Such term includes such location only during the period such entitlement is in effect.
“(c) APPLICABLE PERIOD.—
“(1) IN GENERAL.—Except as provided in paragraph (2), the applicable period is—
“(A) the portion of the first taxable year ending after June 9, 2015, which begins on such date, and
“(B) any subsequent taxable year beginning before January 1, 2026.
“(2) WITHHOLDING.—In the case of subsection (a)(5), the applicable period is—
“(A) the portion of the first taxable year ending after the date of the enactment of this Act [Enacted: Dec. 22, 2017] which begins on such date, and
“(B) any subsequent taxable year beginning before January 1, 2026.
“(d) EFFECTIVE DATE.—
“(1) IN GENERAL.—Except as provided in paragraph (2), the provisions of this section shall take effect on June 9, 2015.
“(2) WITHHOLDING.—Subsection (a)(5) shall apply to remuneration paid after the date of the enactment of this Act.”
QUALIFIED HAZARDOUS DUTY AREA TREATED AS COMBAT ZONE
Section 1 of Pub. L. 106-21, provided that:
“(a) General rule--For purposes of the following provisions of the Internal Revenue Code of 1986, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under section 112 of such Code):”
* * *
“(3) Section 692 (relating to income taxes of members of Armed Forces on death).”
* * *
“(b) Qualified Hazardous Duty Area.--For purposes of this section, the term “qualified hazardous duty area” means any area of the Federal Republic of Yugoslavia (Serbia/Montenegro), Albania, the Adriatic Sea, and the northern Ionian Sea (above the 39th parallel) during the period (which includes the date of the enactment of this Act) that any member of the Armed Forces of the United States is entitled to special pay under section 310 of title 37, United States Code (relating to special pay: duty subject to hostile fire or imminent danger) for services performed in such area.
“(c) Special Rule for Section 7508.--Solely for purposes of applying section 7508 of the Internal Revenue Code of 1986, in the case of an individual who is performing services as part of Operation Allied Force outside the United States while deployed away from such individual's permanent duty station, the term “qualified hazardous duty area” includes, during the period for which the entitlement referred to in subsection (b) is in effect, any area in which such services are performed.
“(d) Effective Dates.--
“(1) In general.--Except as provided in paragraph (2), this section shall take effect on March 24, 1999.
“(2) Withholding.--Subsection (a)(5) shall apply to renumeration paid after the date of the enactment of this Act [Enactment Date: April 19, 1999].”
QUALIFIED HAZARDOUS DUTY AREA TREATED AS COMBAT ZONE
Section 1(a), (b) of Pub. L. 104-117 provided that:
“(a) General Rule.--For purposes of the following provisions of the Internal Revenue Code of 1986, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under section 112 of such Code):
“(3) Section 692 (relating to income taxes of members of Armed Forces on death).
“(b) Qualified Hazardous Duty Area.--For purposes of this section, the term “qualified hazardous duty area” means Bosnia and Herzegovina, Croatia, or Macedonia, if as of the date of the enactment of this section any member of the Armed Forces of the United States is entitled to special pay under section 310 of title 37, United States Code (relating to special pay; duty subject to hostile fire or imminent danger) for services performed in such country. Such term includes any such country only during the period such entitlement is in effect. Solely for purposes of applying section 7508 of the Internal Revenue Code of 1986, in the case of an individual who is performing services as part of Operation Joint Endeavor outside the United States while deployed away from such individual's permanent duty station, the term “qualified hazardous duty area” includes, during the period for which such entitlement is in effect, any area in which such services are performed.”
REFUNDS AND CREDITS OF OVERPAYMENTS FOR TAXABLE YEARS ENDING ON OR AFTER FEBRUARY 28, 1961, RESULTING FROM APPLICATION OF PROVISIONS
Section 4(c) of Pub. L. 93-597, as amended by Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “If the refund or credit of any overpayment for any taxable year ending on or after February 28, 1961, resulting from the application of section 692 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a) of this section) is prevented at any time before the expiration of one year after the date of the enactment of this Act [Jan. 2, 1975] by the operation of any law or rule of law, but would not have been so prevented if claim for refund or credit therefor were made on the due date for the return for the taxable year of his death (or any later year), refund or credit of such overpayment may, nevertheless, be made or allowed if claim therefor is filed before the expiration of such one-year period.”
TREATMENT OF DIRECTOR GENERAL OF MULTINATIONAL FORCE IN SINAI
Section 722(g)(4) of Pub. L. 98-369, as amended by Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “For purposes of section 692(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the Director General of the Multinational Force and Observers in the Sinai who died on February 15, 1984, shall be treated as if he were a civilian employee of the United States while he served as such Director General.”