Attention! During this current global situation the men and women of American's armed services are called on more and more to serve their country in some of the most dangerous places in the world. It's no secret that military pay is not the best and even military personal can get stuck with an IRS tax debt.
Even though the IRS is known for their cold-blooded approach to collecting on unpaid debts, even they have to give up the respect due to our men and women in uniform.
IRS Support? For those of you who are in the military and your families, the IRS is far more lenient on their collection practices than with the average Joe, and it's important to know what the IRS can and can not due to your financial lifestyle.
The IRS bends over backwards to make sure that troops stationed in hazardous areas, and combat zones around the world do not have to worry about an IRS debt.
Care package … When you're in a combat zone the IRS will suspend the following for the service-person.
· Filing tax returns: When you're getting shot at everyday that April 15th deadline can slip your mind. The IRS does not expect you to fill out your taxes in the middle of a firefight, and they do not expect you to work on your returns during the minimal amount of down time you have.
· Paying back taxes: Most of your money has to go to your family. Since you're risking your life daily Uncle Sam is not going to make you pay him while you're fighting for him.
· The accrual of interest and penalties on a debt: You already owe a debt to the IRS, and when you get back to the States it will be waiting for you. But since you were not able to pay through no fault of your own you will not have to worry about any interest or penalties. That can keep your debt from ballooning out of control.
· Any and all collection activities: Since you're overseas any collection actions will only hurt your family and create undue hardship for them, so the IRS does not take any kind of collection against you or your family.
Take your time … The time period that these actions will be suspended for equals the length of time the service-person spends in the combat zone, plus any time they have to spend in an out of Country hospital due to wounds, plus an additional 180 days.
Even if you're not taking fire … But what about service personal who are not in a combat zone? They can get relief from the IRS as well under the Service member's Civil Relief Act; also known as "Soldier's and Sailor's" or SCRA for short.
When a service member has a tax debt that he / she can not afford they can apply for a deferrment of debt. This deferment can suspend all income tax debt due and collection actions. The deferment also protects your spouse from IRS collections. However there are some steps that must be followed to get a military deferment.
1. You must submit a written request
2. You must establish that they are active military
3. You must provide proof that their ability to pay off the debt is affected because of their military service.
4. You must be in compliance and do not have any non-filed tax years.
You and your families have sacrificed so much for your country, and you do not always get the praise you deserve. But you've got know you're loved and respected when the IRS will cut you a break.
Now you have the smoking gun … Use it!