§112 — Certain combat zone compensation of members of the Armed Forces
206 citing cases
Statute Text — 26 U.S.C. §112
Gross income does not include compensation received for active service as a member below the grade of commissioned officer in the Armed Forces of the United States for any month during any part of which such member—
served in a combat zone, or
was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone; but this paragraph shall not apply for any month beginning more than 2 years after the date of the termination of combatant activities in such zone.
With respect to service in the combat zone designated for purposes of the Vietnam conflict, paragraph (2) shall not apply to any month after January 1978.
Gross income does not include so much of the compensation as does not exceed the maximum enlisted amount received for active service as a commissioned officer in the Armed Forces of the United States for any month during any part of which such officer—
served in a combat zone, or
was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone; but this paragraph shall not apply for any month beginning more than 2 years after the date of the termination of combatant activities in such zone.
With respect to service in the combat zone designated for purposes of the Vietnam conflict, paragraph (2) shall not apply to any month after January 1978.
For purposes of this section—
The term “commissioned officer” does not include a commissioned warrant officer.
The term “combat zone” means any area which the President of the United States by Executive Order designates, for purposes of this section or corresponding provisions of prior income tax laws, as an area in which Armed Forces of the United States are or have engaged in combat.
Service is performed in a combat zone only if performed on or after the date designated by the President by Executive Order as the date of the commencing of combatant activities in such zone, and on or before the date designated by the President by Executive Order as the date of the termination of combatant activities in such zone.
The term “compensation” does not include pensions and retirement pay.
The term “maximum enlisted amount” means, for any month, the sum of—
the highest rate of basic pay payable for such month to any enlisted member of the Armed Forces of the United States at the highest pay grade applicable to enlisted members, and
in the case of an officer entitled to special pay under section 310, or paragraph (1) or (3) of section 351(a), of title 37, United States Code, for such month, the amount of such special pay payable to such officer for such month.
Gross income does not include compensation received for active service as a member of the Armed Forces of the United States for any month during any part of which such member is in a missing status (as defined in section 551(2) of title 37, United States Code) during the Vietnam conflict as a result of such conflict, other than a period with respect to which it is officially determined under section 552(c) of such title 37 that he is officially absent from his post of duty without authority.
Gross income does not include compensation received for active service as an employee for any month during any part of which such employee is in a missing status during the Vietnam conflict as a result of such conflict. For purposes of this paragraph, the terms “active service”, “employee”, and “missing status” have the respective meanings given to such terms by section 5561 of title 5 of the United States Code.
For purposes of this subsection, the Vietnam conflict began February 28, 1961, and ends on the date designated by the President by Executive order as the date of the termination of combatant activities in Vietnam. For purposes of this subsection, an individual is in a missing status as a result of the Vietnam conflict if immediately before such status began he was performing service in Vietnam or was performing service in Southeast Asia in direct support of military operations in Vietnam.
Treasury Regulations
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Treas. Reg. §1.112-1Combat zone compensation of members of the Armed Forces
(a) Combat zone compensation exclusion—(1) Amount excluded. In addition to the exemptions and credits otherwise applicable, section 112 excludes from gross income the following compensation of members of the Armed Forces:
(i) Enlisted personnel. Compensation received for active service as a member below the grade of commissioned officer in the Armed Forces of the United States for any month during any part of which the member served in a combat zone or was hospitalized at any place as a result of wounds, disease, or injury incurred while serving in the combat zone.
(ii) Commissioned officers. Compensation not exceeding the monthly dollar limit received for active service as a commissioned officer in the Armed Forces of the United States for any month during any part of which the officer served in a combat zone or was hospitalized at any place as a result of wounds, disease, or injury incurred while serving in the combat zone. The monthly dollar limit is the monthly amount excludable from the officer's income under section 112(b) as amended. Beginning in 1966, the monthly dollar limit for periods of active service after 1965 became $500. As of September 10, 1993, the monthly dollar limit continues to be $500.
(2) Time limits on exclusion during hospitalization. Compensation received for service for any month of hospitalization that begins more than 2 years after the date specified by the President in an Executive Order as the date of the termination of combatant activities in the combat zone cannot be excluded under section 112. Furthermore, compensation received while hospitalized after January 1978 for wounds, disease, or injury incurred in the Vietnam combat zone designated by Executive Order 11216 cannot be excluded under section 112.
(3) Special terms. A commissioned warrant officer is not a commissioned officer under section 112(b) and is entitled to the exclusion allowed to enlisted personnel under section 112(a). Compensation, for the purpose of section 112, does not include pensions and retirement pay. Armed Forces of the United States is defined (and members of the Armed Forces are described) in section 7701(a)(15).
(4) Military compensation only. Only compensation paid by the Armed Forces of the United States to members of the Armed Forces can be excluded under section 112, except for compensation paid by an agency or instrumentality of the United States or by an international organization to a member of the Armed Forces whose military active duty status continues during the member's assignment to the agency or instrumentality or organization on official detail. Compensation paid by other employers (whether private enterprises or governmental entities) to members of the Armed Forces cannot be excluded under section 112 even if the payment is made to supplement the member's military compensation or is labeled by the employer as compensation for active service in the Armed Forces of the United States. Compensation paid to civilian employees of the federal government, including civilian employees of the Armed Forces, cannot be excluded under section 112, except as provided in section 112(d)(2) (which extends the exclusion to compensation of civilian employees of the federal government in missing status due to the Vietnam conflict).
(b) Service in combat zone—(1) Active service. The exclusion under section 112 applies only if active service is performed in a combat zone. A member of the Armed Forces is in active service if the member is actually serving in the Armed Forces of the United States. Periods during which a member of the Armed Forces is absent from duty on account of sickness, wounds, leave, internment by the enemy, or other lawful cause are periods of active service. A member of the Armed Forces in active service in a combat zone who becomes a prisoner of war or missing in action in the combat zone is deemed, for the purpose of section 112, to continue in active service in the combat zone for the period for which the member is treated as a prisoner of war or as missing in action for military pay purposes.
(2) Combat zone status. Except as provided in paragraphs (e) and (f) of this section, service is performed in a combat zone only if it is performed in an area which the President of the United States has designated by Executive Order, for the purpose of section 112, as an area in which Armed Forces of the United States are or have been engaged in combat, and only if it is performed on or after the date designated by the President by Executive Order as the date of the commencing of combatant activities in that zone and on or before the date designated by the President by Executive Order as the date of the termination of combatant activities in that zone.
(3) Partial month service. If a member of the Armed Forces serves in a combat zone for any part of a month, the member is entitled to the exclusion for that month to the same extent as if the member has served in that zone for the entire month. If a member of the Armed Forces is hospitalized for a part of a month as a result of wounds, disease, or injury incurred while serving in that zone, the member is entitled to the exclusion for the entire month.
(4) Payment time and place. The time and place of payment are irrelevant in considering whether compensation is excludable under section 112; rather, the time and place of the entitlement to compensation determine whether the compensation is excludable under section 112. Thus, compensation can be excluded under section 112 whether or not it is received outside a combat zone, or while the recipient is hospitalized, or in a year different from that in which the service was rendered for which the compensation is paid, provided that the member's entitlement to the compensation fully accrued in a month during which the member served in the combat zone or was hospitalized as a result of wounds, disease, or injury incurred while serving in the combat zone. For this purpose, entitlement to compensation fully accrues upon the completion of all actions required of the member to receive the compensation. Compensation received by a member of the Armed Forces for services rendered while in active service can be excluded under section 112 even though payment is received subsequent to discharge or release from active service. Compensation credited to a deceased member's account for a period subsequent to the established date of the member's death and received by the member's estate can be excluded from the gross income of the estate under section 112 to the same extent that it would have been excluded from the gross income of the member had the member lived and received the compensation.
(5) Examples of combat zone compensation. The rules of this section are illustrated by the following examples:
(c) Hospitalization—(1) Presumption of combat zone injury. If an individual is hospitalized for wound, disease, or injury while serving in a combat zone, the wound, disease, or injury will be presumed to have been incurred while serving in a combat zone, unless the contrary clearly appears. In certain cases, however, a wound, disease, or injury may have been incurred while serving in a combat zone even though the individual was not hospitalized for it while so serving. In exceptional cases, a wound, disease, or injury will not have been incurred while serving in a combat zone even though the individual was hospitalized for it while so serving.
(2) Length of hospitalization. An individual is hospitalized only until the date the individual is discharged from the hospital.
(3) Examples of combat zone injury. The rules of this paragraph (c) are illustrated by the following examples:
(d) Married members. The exclusion under section 112 applies without regard to the marital status of the recipient of the compensation. If both spouses meet the requirements of the statute, then each spouse is entitled to the benefit of an exclusion. In the case of a husband and wife domiciled in a State recognized for Federal income tax purposes as a community property State, any exclusion from gross income under section 112 operates before apportionment of the gross income of the spouses under community property law. For example, a husband and wife are domiciled in a community property State and the member spouse is entitled, as a commissioned officer, to the benefit of the exclusion under section 112(b) of $500 for each month. The member receives $7,899 as compensation for active service for 3 months in a combat zone. Of that amount, $1,500 is excluded from gross income under section 112(b) and $6,399 is taken into account in determining the gross income of both spouses.
(e) Service in area outside combat zone—(1) Combat zone treatment. For purposes of section 112, a member of the Armed Forces who performs military service in an area outside the area designated by Executive Order as a combat zone is deemed to serve in that combat zone while the member's service is in direct support of military operations in that zone and qualifies the member for the special pay for duty subject to hostile fire or imminent danger authorized under section 310 of title 37 of the United States Code, as amended (37 U.S.C. 310) (hostile fire/imminent danger pay).
(2) Examples of combat zone treatment. The examples in this paragraph (e)(2) are based on the following circumstances: Certain areas, airspace, and adjacent waters are designated as a combat zone for purposes of section 112 as of May 1. Some members of the Armed Forces are stationed in the combat zone; others are stationed in two foreign countries outside the combat zone, named Nearby Country and Destination Country.
(f) Nonqualifying presence in combat zone—(1) Inapplicability of exclusion. The following members of the Armed Forces are not deemed to serve in a combat zone within the meaning of section 112(a)(1) or section 112(b)(1) or to be hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone within the meaning of section 112(a)(2) or section 112(b)(2)—
(i) Members present in a combat zone while on leave from a duty station located outside a combat zone;
(ii) Members who pass over or through a combat zone during the course of a trip between two points both of which lie outside a combat zone; or
(iii) Members present in a combat zone solely for their own personal convenience.
(2) Exceptions for temporary duty or special pay. Paragraph (f)(1) of this section does not apply to members of the Armed Forces who—
(i) Are assigned on official temporary duty to a combat zone (including official temporary duty to the airspace of a combat zone); or
(ii) Qualify for hostile fire/imminent danger pay.
(3) Examples of nonqualifying presence and its exceptions. The examples in this paragraph (f)(3) are based on the following circumstances: Certain areas, airspace, and adjacent waters are designated as a combat zone for purposes of section 112 as of May 1. Some members of the Armed Forces are stationed in the combat zone; others are stationed in two foreign countries outside the combat zone, named Nearby Country and Destination Country.
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Treas. Reg. §1.112-1(a)Combat zone compensation exclusion—(1) Amount excluded.
Combat zone compensation exclusion—(1) Amount excluded. In addition to the exemptions and credits otherwise applicable, section 112 excludes from gross income the following compensation of members of the Armed Forces:
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Treas. Reg. §1.112-1(b)Service in combat zone—(1) Active service.
Service in combat zone—(1) Active service. The exclusion under section 112 applies only if active service is performed in a combat zone. A member of the Armed Forces is in active service if the member is actually serving in the Armed Forces of the United States. Periods during which a member of the Armed Forces is absent from duty on account of sickness, wounds, leave, internment by the enemy, or other lawful cause are periods of active service. A member of the Armed Forces in active service in a combat zone who becomes a prisoner of war or missing in action in the combat zone is deemed, for the purpose of section 112, to continue in active service in the combat zone for the period for which the member is treated as a prisoner of war or as missing in action for military pay purposes.
(2) Combat zone status. Except as provided in paragraphs (e) and (f) of this section, service is performed in a combat zone only if it is performed in an area which the President of the United States has designated by Executive Order, for the purpose of section 112, as an area in which Armed Forces of the United States are or have been engaged in combat, and only if it is performed on or after the date designated by the President by Executive Order as the date of the commencing of combatant activities in that zone and on or before the date designated by the President by Executive Order as the date of the termination of combatant activities in that zone.
(3) Partial month service. If a member of the Armed Forces serves in a combat zone for any part of a month, the member is entitled to the exclusion for that month to the same extent as if the member has served in that zone for the entire month. If a member of the Armed Forces is hospitalized for a part of a month as a result of wounds, disease, or injury incurred while serving in that zone, the member is entitled to the exclusion for the entire month.
(4) Payment time and place. The time and place of payment are irrelevant in considering whether compensation is excludable under section 112; rather, the time and place of the entitlement to compensation determine whether the compensation is excludable under section 112. Thus, compensation can be excluded under section 112 whether or not it is received outside a combat zone, or while the recipient is hospitalized, or in a year different from that in which the service was rendered for which the compensation is paid, provided that the member's entitlement to the compensation fully accrued in a month during which the member served in the combat zone or was hospitalized as a result of wounds, disease, or injury incurred while serving in the combat zone. For this purpose, entitlement to compensation fully accrues upon the completion of all actions required of the member to receive the compensation. Compensation received by a member of the Armed Forces for services rendered while in active service can be excluded under section 112 even though payment is received subsequent to discharge or release from active service. Compensation credited to a deceased member's account for a period subsequent to the established date of the member's death and received by the member's estate can be excluded from the gross income of the estate under section 112 to the same extent that it would have been excluded from the gross income of the member had the member lived and received the compensation.
(5) Examples of combat zone compensation. The rules of this section are illustrated by the following examples:
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Treas. Reg. §1.112-1(c)Hospitalization—(1) Presumption of combat zone injury.
Hospitalization—(1) Presumption of combat zone injury. If an individual is hospitalized for wound, disease, or injury while serving in a combat zone, the wound, disease, or injury will be presumed to have been incurred while serving in a combat zone, unless the contrary clearly appears. In certain cases, however, a wound, disease, or injury may have been incurred while serving in a combat zone even though the individual was not hospitalized for it while so serving. In exceptional cases, a wound, disease, or injury will not have been incurred while serving in a combat zone even though the individual was hospitalized for it while so serving.
(2) Length of hospitalization. An individual is hospitalized only until the date the individual is discharged from the hospital.
(3) Examples of combat zone injury. The rules of this paragraph (c) are illustrated by the following examples:
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Treas. Reg. §1.112-1(d)Married members.
Married members. The exclusion under section 112 applies without regard to the marital status of the recipient of the compensation. If both spouses meet the requirements of the statute, then each spouse is entitled to the benefit of an exclusion. In the case of a husband and wife domiciled in a State recognized for Federal income tax purposes as a community property State, any exclusion from gross income under section 112 operates before apportionment of the gross income of the spouses under community property law. For example, a husband and wife are domiciled in a community property State and the member spouse is entitled, as a commissioned officer, to the benefit of the exclusion under section 112(b) of $500 for each month. The member receives $7,899 as compensation for active service for 3 months in a combat zone. Of that amount, $1,500 is excluded from gross income under section 112(b) and $6,399 is taken into account in determining the gross income of both spouses.
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Treas. Reg. §1.112-1(e)Service in area outside combat zone—(1) Combat zone treatment.
Service in area outside combat zone—(1) Combat zone treatment. For purposes of section 112, a member of the Armed Forces who performs military service in an area outside the area designated by Executive Order as a combat zone is deemed to serve in that combat zone while the member's service is in direct support of military operations in that zone and qualifies the member for the special pay for duty subject to hostile fire or imminent danger authorized under section 310 of title 37 of the United States Code, as amended (37 U.S.C. 310) (hostile fire/imminent danger pay).
(2) Examples of combat zone treatment. The examples in this paragraph (e)(2) are based on the following circumstances: Certain areas, airspace, and adjacent waters are designated as a combat zone for purposes of section 112 as of May 1. Some members of the Armed Forces are stationed in the combat zone; others are stationed in two foreign countries outside the combat zone, named Nearby Country and Destination Country.
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Treas. Reg. §1.112-1(f)Nonqualifying presence in combat zone—(1) Inapplicability of exclusion.
Nonqualifying presence in combat zone—(1) Inapplicability of exclusion. The following members of the Armed Forces are not deemed to serve in a combat zone within the meaning of section 112(a)(1) or section 112(b)(1) or to be hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone within the meaning of section 112(a)(2) or section 112(b)(2)—
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Treas. Reg. §1.112-1(i)§1.112-1(i)
Are assigned on official temporary duty to a combat zone (including official temporary duty to the airspace of a combat zone); or
(ii) Qualify for hostile fire/imminent danger pay.
(3) Examples of nonqualifying presence and its exceptions. The examples in this paragraph (f)(3) are based on the following circumstances: Certain areas, airspace, and adjacent waters are designated as a combat zone for purposes of section 112 as of May 1. Some members of the Armed Forces are stationed in the combat zone; others are stationed in two foreign countries outside the combat zone, named Nearby Country and Destination Country.
206 Citing Cases
Therefore, to the extent respondent seeks to use Notice 2014-7, supra, to deprive petitioners ofa benefit bestowed by Congress, we hold he may not do so.
Each amendment thereto also is positive law. And, as we have said before, any argument that the revenue laws are not applicable because ofthe status ofthe Internal Revenue Code is frivolous. E.g., Wagenknecht v. Commissioner, T.C. Memo. 2008-288; Urban v. Commissioner, T.C. Memo. 1984-85. The language used in section 6331(a) has ch
On his amended returns petitioner claimed that he was exempt from all Federal income tax for those years under section 112 because he was working in a qualified combat zone.
112 ("[t]he United States Statutes at Large shall be legal evidence oflaws") with 1 U.S.C. sec. 204(a) (the United States Code is "prima facie" evidence ofthe laws ofthe United States). See, e.g., U.S. Nat'l Bank ofOr. v. Indep. Ins. Agents ofAm., Inc., 508 U.S. 439, 448 (1993) ("Though the appearance ofa provision in the current edition ofthe
112 (“[t]he United States Statutes at Large shall be legal evidence of laws”) with 1 U.S.C. sec. 204(a) (the United States Code is “prima facie” evidence of the laws of the United States). See, e.g., U.S. Nat’l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 448 (1993) (“Though the appearance of a provision in the current edition
It couldn't agree with such a "narrow reading ofthe statute," determining the "statute [did] not require the character ofthe [ten.acres of unimproved land] to be determined in vacuo, ignoring.what had gone before." .
For the reasons stated herein, we hold that petitioner' s income may not be excluded and that he is liable only fþr the section 6654 (a) addition to tax.
Unlike section 121(a), which excludes gain from the sale .. of. property used as a principal residence, former section 112(n)( .1) provided .13 for a deferral of gain from the sale of .a principal residence In the Internal Revenue Code of 1954, ch .
ices under circumstances which, in justice, preclude him from denying an obligation to pay for them'". Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996) (quoting Bradkin v. Leverton, 26 N.Y.2d 192, 196 (1970); see also Restatement, Restitution, sec. 112 (1937)). Petitioner requested and received Crocus's services in helping petitioner conduct foreign trade shows. Respondent acknowledges Crocus's services were substantial and significant. - 54 - Because Crocus's sole owner, Agalarov, owns on
Commissioner, supra, involved section 112(f)(1) of the Internal Revenue Code of 1939 (another predecessor of section - 12 - 1033).
Military subsistence, uniform allowances, and other amounts received as commutation of quarters are excludable from gross income. See sec. 1.61-2(b), Income Tax Regs. - 4 - Petitioner contends that the unreported portion of his JROTC pay represents "qualified military benefits" that are excludable from gross income pursuant to section 13
Section 112 provides that certain compensation received by members of the Armed Forces of the United States serving in combat zones or hospitalized as a result of injuries received in such zones shall not be included in gross income. Section 7701(a)(15) defines “Armed Forces of the United States” to include “all regular and reserve components of th
Moreover, military subsistence, uniform allowances, and other amounts received as commutation of quarters are excludable from gross income. See sec. 1.61-2(b), Income Tax Regs. I The issue before us is whether the pay that petitioner received as a JROTC instructor included (or should be deemed to include) nontaxable military allowances,
For purposes of section 7508, a “combat zone” is an area designated as such by the President of the United States by Executive order for purposes of section 112.4 However, Korea has not been a combat zone since January 1955.5 Accordingly, section 7508 offers petitioner no solace.
In this regard, the taxpayer ostensibly arranged a "reorganization" pursuant to section 112(g) of the Revenue Act of 1928, ch.
112.650 through 112.667 (1997); Or. Rev. Stat. sec. 112.662 and Comment, Uniform Disclaimer of Transfers by Will, Intestacy or Appointment Act, sec. 5 ("Uniform Act"). Oregon Revised Statutes section 112.652 provides generally that an heir, legatee, or devisee may - 27 - disclaim the right of succession to any property by delivering to the de
As early as 1961, in interpreting the predecessor of section 1034 (section 112(n) of the 1939 Code), the U.S.
In this regard, the taxpayer ostensibly arranged a "reorganization" pursuant to section 112(g) of the Revenue Act of 1928, ch.
Additionally, military subsistence and uniform allowances and other amounts received as commutation of quarters are excluded from gross income. See sec. 1.61-2(b), Income Tax Regs. - 4 - The Reserve Officers' Training Corps Vitalization Act of 1964, Pub. L. 88-647, sec. 101, 78 Stat. 1063 (codified as amended at 10 U.S.C. section 2031 (1
We hold that no portion of the separation payment would be excludable from gross income under section 112.2 Section 112 was enacted to provide a tax benefit to members of the armed services whose lives were placed at risk because of their service to their country.
Congress enacted section 112(n), the predecessor to section 1034, as an amendment to the 1939 5 The wide scope of powers of the legislature under the 14th Amendment in the matter of classification was discussed at length by the Supreme Court in Carmichael v.
tioner is not liable for the additions to tax. The remaining issue for our consideration is whether the special separation payment to which petitioner became entitled while serving in a combat zone is excludable from petitioner’s gross income under section 112. Background This case was submitted fully stipulated pursuant to Rule 122. Petitioner, Ralph F. Waterman, served in the U.S. Navy for 14 years and 3 months as an enlisted person. Petitioner was stationed aboard the U.S.S. America in the Pe