I 

108TH CONGRESS 

1ST SESSION H. R. 662

To amend the Internal Revenue Code of 1986 to improve tax equity for 

military personnel, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 11, 2003

Mr. SKELTON introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to improve 

tax equity for military personnel, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Armed and Foreign 

5 Services Tax Fairness Act of 2003’’.
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1 SEC. 2. SPECIAL RULE FOR MEMBERS OF UNIFORMED 

2 SERVICES AND FOREIGN SERVICE IN DETER3 MINING EXCLUSION OF GAIN FROM SALE OF 

4 PRINCIPAL RESIDENCE. 

5 (a) IN GENERAL.—Subsection (d) of section 121 of 

6 the Internal Revenue Code of 1986 (relating to exclusion 

7 of gain from sale of principal residence) is amended by 

8 adding at the end the following new paragraph: 

9 ‘‘(9) MEMBERS OF UNIFORMED SERVICES AND

10 FOREIGN SERVICE.—

11 ‘‘(A) IN GENERAL.—At the election of an 

12 individual with respect to a property, the run13 ning of the 5-year period described in sub14 section (a) with respect to such property shall 

15 be suspended during any period that such indi16 vidual or such individual’s spouse is serving on 

17 qualified official extended duty as a member of 

18 the uniformed services or of the Foreign Serv19 ice. 

20 ‘‘(B) MAXIMUM PERIOD OF SUSPENSION.—

21 The 5-year period described in subsection (a) 

22 shall not be extended more than 5 years by rea23 son of subparagraph (A). 

24 ‘‘(C) QUALIFIED OFFICIAL EXTENDED

25 DUTY.—For purposes of this paragraph— 
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1 ‘‘(i) IN GENERAL.—The term ‘quali2 fied official extended duty’ means any ex3 tended duty while serving at a duty station 

4 which is at least 50 miles from such prop5 erty or while residing under Government 

6 orders in Government quarters. 

7 ‘‘(ii) UNIFORMED SERVICES.—The 

8 term ‘uniformed services’ has the meaning 

9 given such term by section 101(a)(5) of 

10 title 10, United States Code, as in effect 

11 on the date of the enactment of this para12 graph. 

13 ‘‘(iii) FOREIGN SERVICE OF THE

14 UNITED STATES.—The term ‘member of 

15 the Foreign Service’ has the meaning given 

16 the term ‘member of the Service’ by para17 graph (1), (2), (3), (4), or (5) of section 

18 103 of the Foreign Service Act of 1980. 

19 ‘‘(iv) EXTENDED DUTY.—The term 

20 ‘extended duty’ means any period of duty 

21 pursuant to a call or order to such duty for 

22 a period in excess of 90 days or for an in23 definite period. 

24 ‘‘(D) SPECIAL RULES RELATING TO ELEC25 TION.—
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1 ‘‘(i) ELECTION LIMITED TO 1 PROP2 ERTY AT A TIME.—An election under sub3 paragraph (A) with respect to any property 

4 may not be made if such an election is in 

5 effect with respect to any other property. 

6 ‘‘(ii) REVOCATION OF ELECTION.—An 

7 election under subparagraph (A) may be 

8 revoked at any time.’’. 

9 (b) EFFECTIVE DATE; SPECIAL RULE.— 

10 (1) EFFECTIVE DATE.—The amendment made 

11 by this section shall take effect as if included in the 

12 amendments made by section 312 of the Taxpayer 

13 Relief Act of 1997. 

14 (2) WAIVER OF LIMITATIONS.—If refund or 

15 credit of any overpayment of tax resulting from the 

16 amendment made by this section is prevented at any 

17 time before the close of the 1-year period beginning 

18 on the date of the enactment of this Act by the oper19 ation of any law or rule of law (including res judi20 cata), such refund or credit may nevertheless be 

21 made or allowed if claim therefor is filed before the 

22 close of such period.

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