Terroristic or Military Action Forgiveness (IRC Sec 692)
In specific situations, tax liability is forgiven for military service members who die as a direct result of terrorist activity or military action, whether abroad or on U.S. soil.
Tax liability is forgiven for an individual who:
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Is a military or civilian U.S. employee at death, and
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Dies from wounds or injury incurred while a U.S. employee in a terroristic or military action regardless of where the terroristic or military action occurred.
Tax is forgiven for the year in which the individual dies and any prior taxable year in the period beginning with the last tax year ending before the decedent’s wounds or injury occurred.
Terroristic or Military Action
Is any terroristic activity primarily directed against the United States or its allies, or any military action involving the U.S. Armed Forces resulting from violence or aggression against the United States or its allies. Any multinational force in which the United States participates is considered an ally of the United States.
“ Example - Army Private John Kane died in 2022 of wounds incurred outside the United States in a terroristic attack in 2021. His income tax liability is forgiven for all tax years from 2020 through 2022. Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended. ”
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