Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Combat-Injured Veterans Tax Fairness
Act of 2016''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Approximately 10,000 to 11,000 individuals are retired
from service in the Armed Forces for medical reasons each year.
(2) Some of such individuals are separated from service in
the Armed Forces for combat-related injuries (as defined in
section 104(b)(3) of the Internal Revenue Code of 1986).
(3) Congress has recognized the tremendous personal
sacrifice of veterans with combat-related injuries by, among
other things, specifically excluding from taxable income
severance pay received for combat-related injuries.
(4) Since 1991, the Secretary of Defense has improperly
withheld taxes from severance pay for wounded veterans, thus
denying them their due compensation and a significant benefit
intended by Congress.
(5) Many veterans owed redress are beyond the statutory
period to file an amended tax return because they were not or
are not aware that taxes were improperly withheld.

SEC. 3. RESTORATION OF AMOUNTS IMPROPERLY WITHHELD FOR TAX PURPOSES
FROM SEVERANCE PAYMENTS TO VETERANS WITH COMBAT-RELATED
INJURIES.

(a) In General.--Not later than one year after the date of the
enactment of this Act, the Secretary of Defense shall--
(1) identify--
(A) the severance payments--
(i) that the Secretary paid after January
17, 1991;
(ii) that the Secretary computed under
section 1212 of title 10, United States Code;
(iii) that were not considered gross income
pursuant to section 104(a)(4) of the Internal
Revenue Code of 1986; and
(iv) from which the Secretary withheld
amounts for tax purposes; and
(B) the individuals to whom such severance payments
were made; and
(2) with respect to each person identified under paragraph
(1)(B), provide--
(A) notice of--
(i) the amount of severance payments in
paragraph (1)(A) which were improperly withheld
for tax purposes; and
(ii) such other information determined to
be necessary by the Secretary of Treasury to
carry out the purposes of this section; and
(B) instructions for filing amended tax returns to
recover the amounts improperly withheld for tax
purposes.
(b) Extension of Limitation on Time for Credit or Refund.--
(1) Period for filing claim.--If a claim for credit or
refund under section 6511(a) of the Internal Revenue Code of
1986 relates to a specified overpayment, the 3-year period of
limitation prescribed by such subsection shall not expire
before the date which is 1 year after the date the information
return described in subsection (a)(2) is filed. The allowable
amount of credit or refund of a specified overpayment shall be
determined without regard to the amount of tax paid within the
period provided in section 6511(b)(2).
(2) Specified overpayment.--For purposes of paragraph (1),
the term ''specified overpayment'' means an overpayment
attributable to a severance payment described in subsection
(a)(1).

SEC. 4. REQUIREMENT THAT SECRETARY OF DEFENSE ENSURE AMOUNTS ARE NOT
WITHHELD FOR TAX PURPOSES FROM SEVERANCE PAYMENTS NOT
CONSIDERED GROSS INCOME.

The Secretary of Defense shall take such actions as may be
necessary to ensure that amounts are not withheld for tax purposes from
severance payments made by the Secretary to individuals when such
payments are not considered gross income pursuant to section 104(a)(4)
of the Internal Revenue Code of 1986.

SEC. 5. REPORT TO CONGRESS.

(a) In General.--After completing the identification required by
section 3(a) and not later than one year after the date of the
enactment of this Act, the Secretary of Defense shall submit to the
appropriate committees of Congress a report on the actions taken by the
Secretary to carry out this Act.
(b) Contents.--The report submitted under subsection (a) shall
include the following:
(1) The number of individuals identified under section
3(a)(1)(B).
(2) Of all the severance payments described in section
3(a)(1)(A), the aggregate amount that the Secretary withheld
for tax purposes from such payments.
(3) A description of the actions the Secretary plans to
take to carry out section 4.
(c) Appropriate Committees of Congress Defined.--In this section,
the term ''appropriate committees of Congress'' means--
(1) the Committee on Armed Services, the Committee on
Veterans' Affairs, and the Committee on Finance of the Senate;
and
(2) the Committee on Armed Services, the Committee on
Veterans' Affairs, and the Committee on Ways and Means of the
House of Representatives.
Student:
Combat-Injured Veterans Tax Fairness Act of 2016 This bill directs the Department of Defense (DOD) to identify: certain severance payments to veterans with combat-related injuries paid after January 17, 1991, from which DOD withheld amounts for tax purposes, and the individuals to whom such severance payments were made. DOD shall provide each such veteran with: notice of the amount of improperly withheld severance payments, and instructions for filing amended tax returns to recover such amount. The period for filing a related claim with the Internal Revenue Service for a credit or refund is extended beyond the three-year limitation to the date that is one year after DOD provides the veteran with the information required by this Act. DOD shall ensure that amounts are not withheld for tax purposes from DOD severance payments to individuals when such payments are not considered gross income.