Armed Forces Tax Fairness Act of 2003

Bill: 108-s-351
Sponsor: Sen. Grassley, Chuck [R-IA]
Introduced: 2003-02-11 in the Senate
Policy area: Taxation
Subjects: Administrative procedure
Americans in foreign countries
Armed Forces and National Security
Armed forces abroad
Armed forces reserves
Astronautics
Astronauts
Atmosphere
Capital gains tax
Citizenship
College costs
Consumer credit
Crime and Law Enforcement
Day care
Department of Commerce
Department of Health and Human Services
Department of the Treasury
Economics and Public Finance
Education
Estate tax
Expatriation
Families
Federal employees
Foreign service
Fringe benefits
Gifts
Government Operations and Politics
Health
Higher education
Home ownership
Housing and Community Development
Housing finance
Immigration
Income tax
Internal revenue law
International Affairs
Labor and Employment
Law
Marine and coastal resources, fisheries
Military base closures
Military dependents
Military education
Military operations
Military personnel
National Guard
Oceanographic research
Public health personnel
Service academies
Space activities
Space shuttles
Survivors' benefits
Tax administration
Tax credits
Tax deductions
Tax deferral
Tax exclusion
Tax exemption
Tax liens
Tax penalties
Tax refunds
Tax returns
Tax-exempt organizations
Terrorism
Transportation and Public Works
Travel costs
Trusts and trustees
User charges
Veterans' organizations
Visas
War casualties

Summary:
action_date: 2003-02-11
text: Armed Forces Tax Fairness Act of 2003 - Amends the Internal Revenue Code to establish special tax provisions applicable to military personnel, uniformed personnel and families of the Space Shuttle Columbia, including: (1) with respect to military and uniformed personnel, an extension of time to exclude gain from the sale of a principal residence, exclusion from income of certain death gratuity benefits, extending combat zone filing rules to contingency operations, and excluding certain dependent care assistance from income, and the deduction overnight travel expenses for National Guard and Reserve members; and (2) with respect to families of the Space Shuttle Columbia, providing the same tax relief provided to terrorist attack victims to families of the Columbia Space Shuttle.
Suspends the tax-exempt status of a designated terrorist organization.
Establishes IRS service user fee authority through September 30, 2013.
Revises IRC expatriation tax provisions.
action_date: 2003-02-11
text: Armed Forces Tax Fairness Act of 2003 - 
Title I: Improving Tax Equity for Military Personnel
 - (Sec. 101) Amends the Internal Revenue Code (IRC) to authorize a member of the uniformed services or the Foreign Service serving on "qualified official extended duty" (any duty in excess of 90 days while serving at a duty station which is at least 50 miles from the principal residence or while residing under Government orders in Government quarters), to extend for ten years the five-year period utilized in determining full exclusion of gain from the sale of a principal residence.
Includes among the uniformed services: (1) the armed forces; (2) the commissioned corps of the National Oceanic and Atmospheric Administration; and (3) the commissioned corps of the Public Health Service.
Makes such provisions effective as if included in section 312 of the Taxpayer Relief Act of 1997.
States that if a refund or credit resulting from this section is prevented before the close of the one-year period beginning on the date of the enactment of this Act by the operation of any law or rule of law (including res judicata), such refund or credit may be allowed if claimed before the close of such period.
(Sec. 102) Excludes from gross income as a qualified military benefit the amount of the death gratuity payable under chapter 75 of title 10 of the United States Code, effective with respect to deaths occurring after September 10, 2001.
(Sec. 103) Exempts amounts received under the Homeowners Assistance Program from inclusion as gross income.
(Sec. 104) Extends combat zone filing rules to contingency operations.
(Sec. 105) Includes ancestors or lineal descendants of past or present members of the armed forces or of cadets as qualifying members of veterans' organizations for purposes of such organizations' tax-exempt status determination.
(Sec. 106) Includes dependent care assistance provided under a dependent care assistance program for a member of the uniformed services by reason of such member's status or service as an income-excludable qualified military benefit.
(Sec. 107) Exempts distributions from an education individual retirement account from the ten percent additional tax for non-educational use: (1) if made for an account holder at the United States Military Academy, the United States Naval Academy, the United States Air Force Academy, the United States Coast Guard Academy, or the United States Merchant Marine Academy; and (2) to the extent that the distribution does not exceed the costs of advanced education.
(Sec. 108) Suspends the tax-exempt status of a designated terrorist organization (as defined by this Act). Denies: (1) deductions for contributions made to such an organization; and (2) administrative or judicial challenge to such suspension or denial. Provides for refund or credit in a case of erroneous designation.
(Sec. 109) Provides a deduction for itemizers and non-itemizers for unreimbursed overnight travel, meals, and lodging expenses of National Guard and Reserve members who must travel more than 100 miles away from home and stay overnight as part of their official duties.
(Sec. 110) Provides tax relief for families of the Columbia Space Shuttle by making the tax relief provisions applicable to terrorist attack victims applicable to the Columbia Space Shuttle.

Title II: Other Provisions
 - (Sec. 201) Establishes Internal Revenue Service (IRS) service user fee authority through September 30, 2013. Sets forth program criteria and average fee requirements.
(Sec. 202) Authorizes IRS to enter into partial payment installment agreements with taxpayers. Requires review of such agreements at least every two years. Makes such provision effective for agreements entered into on or after the date of enactment of this Act.
(Sec. 203) Revises IRC expatriation tax provisions.
States that all property of a "covered expatriate" (a U.S. citizen who relinquishes citizenship, or a long-term U.S. resident who ceases to be a lawful permanent resident or who commences foreign residency under the provisions of a tax treaty) shall be treated as sold on the day before the "expatriation date" for its fair market value, and that gain (in excess of $600,000) and loss shall be taken into account for the taxable year of the sale (with subsequent adjustment). Permits an individual to defer payments of the additional tax imposed by such deemed sale (but not beyond such person's death). Sets forth interest provisions. Requires provision of tax payment security.
Exempts certain U.S. citizens from being treated as a covered expatriate who: (1) became a citizen of the United States and another country at birth; or (2) relinquished U.S. citizenship before reaching 18 and 1/2 years old.
Permits an individual to make an irrevocable decision to be taxed as a U.S. citizen with respect to all property otherwise covered by the expatriation provisions. Requires an individual to: (1) furnish tax payment security; and (2) waive any rights under U.S. treaties that would preclude assessment or collection of relevant tax.
Excludes certain U.S. real property interests from the provisions of this Act. Subjects the following retirement plans to the provisions of this Act: (1) qualified retirement plans, including specified annuity plans and individual retirement accounts; (2) specified deferred compensation plans; and (3) foreign retirement or pension plans.
Establishes special rules for covered expatriates' interests in trusts and qualified trusts.
Includes in a recipient's gross income the value of property received by gift or bequest from a covered expatriate, with exceptions for transfers otherwise subject to estate or gift tax. Makes such provisions applicable to gifts and bequests received on or after February 5, 2003, from an individual whose expatriation date occurs after such date.
Makes such expatriate tax provisions, unless otherwise provided for by this Act, effective on or after February 5, 2003.
Amends the Immigration and Nationality Act to deny a former citizen reentry into the United States for noncompliance with the provisions of this title. (Current law denies reentry based upon tax-motivated expatriation.) Permits IRS-Immigration and Naturalization Service information sharing for such purpose. Makes such provisions effective upon enactment of this Act.

Legislative actions:
action_date: 2003-02-11
text: Placed on Senate Legislative Calendar under General Orders. Calendar No. 11.
action_date: 2003-02-11
text: Committee on Finance. Original measure reported to Senate by Senator Grassley. With written report No. 108-3.
action_date: 2003-02-11
text: Committee on Finance. Original measure reported to Senate by Senator Grassley. With written report No. 108-3.
action_date: 2003-02-11
text: Committee on Finance. Ordered to be reported without amendment favorably.
action_date: 2003-02-11
text: Introduced in Senate
action_date: 2003-02-05
text: Committee on Finance ordered to be reported an original measure.