§692 — Income taxes of members of Armed Forces, astronauts, and victims of certain terrorist attacks on death
Statute Text — 26 U.S.C. §692
In the case of any individual who dies while in active service as a member of the Armed Forces of the United States, if such death occurred while serving in a combat zone (as determined under section 112) or as a result of wounds, disease, or injury incurred while so serving—
any tax imposed by this subtitle shall not apply with respect to the taxable year in which falls the date of his death, or with respect to any prior taxable year ending on or after the first day he so served in a combat zone; and
any tax under this subtitle and under the corresponding provisions of prior revenue laws for taxable years preceding those specified in paragraph (1) which is unpaid at the date of his death (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
For purposes of this section, in the case of an individual who was in a missing status within the meaning of section 6013(f)(3)(A), the date of his death shall be treated as being not earlier than the date on which a determination of his death is made under section 556 of title 37 of the United States Code. Except in the case of the combat zone designated for purposes of the Vietnam conflict, the preceding sentence shall not cause subsection (a)(1) to apply for any taxable year beginning more than 2 years after the date designated under section 112 as the date of termination of combatant activities in a combat zone.
In the case of any individual who dies while a military or civilian employee of the United States, if such death occurs as a result of wounds or injury which was incurred while the individual was a military or civilian employee of the United States and which was incurred in a terroristic or military action, any tax imposed by this subtitle shall not apply—
with respect to the taxable year in which falls the date of his death, and
with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds or injury were incurred.
For purposes of paragraph (1), the term “terroristic or military action” means—
any terroristic activity which a preponderance of the evidence indicates was directed against the United States or any of its allies, and
any military action involving the Armed Forces of the United States and resulting from violence or aggression against the United States or any of its allies (or threat thereof).
For purposes of the preceding sentence, the term “military action” does not include training exercises.
For purposes of paragraph (2), any multinational force in which the United States is participating shall be treated as an ally of the United States.
In the case of a specified terrorist victim, any tax imposed by this chapter shall not apply—
with respect to the taxable year in which falls the date of death, and
with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds, injury, or illness referred to in paragraph (3) were incurred.
If, but for this paragraph, the amount of tax not imposed by paragraph (1) with respect to a specified terrorist victim is less than $10,000, then such victim shall be treated as having made a payment against the tax imposed by this chapter for such victim’s last taxable year in an amount equal to the excess of $10,000 over the amount of tax not so imposed.
Subject to such rules as the Secretary may prescribe, paragraph (1) shall not apply to the amount of any tax imposed by this chapter which would be computed by only taking into account the items of income, gain, or other amounts attributable to—
deferred compensation which would have been payable after death if the individual had died other than as a specified terrorist victim, or
amounts payable in the taxable year which would not have been payable in such taxable year but for an action taken after
September 11, 2001
.
For purposes of this subsection, the term “specified terrorist victim” means any decedent—
who dies as a result of wounds or injury incurred as a result of the terrorist attacks against the United States on
April 19, 1995
, or
September 11, 2001
, or
who dies as a result of illness incurred as a result of an attack involving anthrax occurring on or after
September 11, 2001
, and before
January 1, 2002
.
Such term shall not include any individual identified by the Attorney General to have been a participant or conspirator in any such attack or a representative of such an individual.
The provisions of this subsection shall apply to any astronaut whose death occurs in the line of duty, except that paragraph (3)(B) shall be applied by using the date of the death of the astronaut rather than September 11, 2001.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.692-1 Abatement of income taxes of certain members of the Armed Forces of the United States upon death
- Treas. Reg. §Treas. Reg. §1.692-1(a) §1.692-1(a)
- Treas. Reg. §Treas. Reg. §1.692-1(b) If such an individual and his spouse have for any such year filed a joint return, the tax abated, credited, or refunded pursuant to the provisions of section 692 for such year shall be an amount equal to that portion of the joint tax liability which is the same percentage of such joint tax liability as a tax computed upon the separate income of such individual is of the sum of the taxes computed upon the separate income of such individual and his spouse, but with respect to taxable years ending
- Treas. Reg. §Treas. Reg. §1.692-1(c) If such an individual and his spouse filed a joint declaration of estimated tax for the taxable year ending with the date of his death, the estimated tax paid pursuant to such declaration may be treated as the estimated tax of either such individual or his spouse, or may be divided between them, in such manner as his legal representative and such spouse may agree.
- Treas. Reg. §Treas. Reg. §1.692-1(d) For the purpose of determining the tax which is unpaid at the date of death, amounts deducted and withheld under chapter 24, subtitle C of the Internal Revenue Code of 1954, or under subchapter D, chapter 9 of the Internal Revenue Code of 1939 (relating to income tax withheld at source on wages), constitute payment of tax imposed under subtitle A of the Internal Revenue Code of 1954 or under chapter 1 of the Internal Revenue Code of 1939, as the case may be.
- Treas. Reg. §Treas. Reg. §1.692-1(e) This section shall have no application whatsoever with respect to the liability of an individual as a transferee of property of a taxpayer where such liability relates to the tax imposed upon the taxpayer by subtitle A of the Internal Revenue Code of 1954 or by chapter 1 of the Internal Revenue Code of 1939.
- Treas. Reg. §Treas. Reg. §1.692-1(i) The libaility of the deceased individual, for the last taxable year, ending on the date of his death, and for any prior taxable year ending on or after the first day he served in a combat zone in active service as a member of the U.
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