Veterans: The IRS May Owe You Money, For A Change

Veterans Benefits
An Airman exits the Keystone Theater after paying their road tax May 12, 2017, at Kadena Air Base, Japan.
U.S. Air Force photo / Senior Airman Omari Bernard.

On the day of President Trump’s historic meeting with Russian President Putin, the Pentagon announced that about 130,000 veterans could be eligible to receive a refund for taxes they paid on disability compensation that shouldn’t have been taxed.

The veterans in question received Disability Severance Pay for combat-related injuries, or the Department of Veterans Affairs determined they were eligible to be compensated for a service-related disability, defense officials told reporters on Monday. They are currently receiving letters from the Internal Revenue Service on behalf of the Pentagon notifying servicemembers that they could receive a refund.

The letters include the amount they received in Disability Severance Pay, which they can include on tax Form 1040X to file their claims, said Army Lt. Col. David Dulaney, executive director of the Armed Forces Tax Council.

Most of the veterans received a disability rating from the VA after they had already paid taxes on their Disability Severance Pay, Dulaney said at a media roundtable. The IRS had put the onus on taxpayers to ask for a refund in such situations, but in December 2016 Congress passed a law requiring the Defense Department to notify veterans that they may be eligible to be reimbursed for taxes withheld between 1991 and 2016.

The IRS has set three levels of compensation, based on which year veterans paid taxes on their Disability Severance Pay, he said. Veterans can get a $1,750 refund if they were taxed between 1991 and 2005; they can get $2,400 for years 2006 through 2010; and they are eligible for a $3,200 refund for years 2011 through 2016.

Veterans who received a letter from the IRS should include on Form 1040X which year they received their Disability Separation Pay and which refund amount they qualify for, Dulaney said.

Those veterans who did not receive a letter but believe they are still owed a refund can also file a 1040X, he said. If they do not have the supporting documentation, they can go to the National Archives for their personnel records.

The Defense Department identified nearly 130,000 combat injured veterans who may be eligible for a refund by November 2017, but it took the IRS until late April 2018 to finalize exactly how those veterans could file their claims, Dulaney said.

“Because the act [law] required that the Department of Defense include those instructions to follow – which the IRS approved – we could not send out the notification letters until that point,” he said. “The DoD has been working with the IRS to finalize the letters and also send those letters out.”

Dulaney stressed that the Pentagon does not have addresses for all the affected veterans, but the IRS does, and that is why they are mailing the letters.

When asked why the Defense Finance and Accounting Service isn’t reimbursing the affected veterans, Dulaney explained that all taxable withholdings are paid to the U.S. Treasury Department, not the Defense Department.

“So it isn’t something that is within a DoD authority to go back and make payment of that from the Treasury,” he said. “In order to seek a refund of the amount of taxes that you paid as a taxpayer throughout the year, you have to file a claim with the IRS directly.”


U.S. Special Presidential Envoy for Hostage Affairs Robert C. O'Brien arrives to the district court, during the second day of ASAP Rocky's trial, in Stockholm, Sweden August 1, 2019. (Reuters/TT News Agency/Fredrik Persson)

WASHINGTON (Reuters) - President Donald Trump on Wednesday named U.S. hostage negotiator Robert O'Brien as his choice to replace John Bolton as his national security adviser, making him the fourth person to hold the post in the Trump administration.

Read More Show Less

Editor's Note: This article by Gina Harkins originally appeared on, a leading source of news for the military and veteran community.

QUANTICO MARINE CORPS BASE, Virginia -- Textron Systems is working with the Navy to turn a mine-sweeping unmanned surface vessel designed to work with Littoral Combat Ships into a mine-hunting craft armed with Hellfire missiles and a .50-caliber machine gun.

Textron displayed the proof-of-concept, surface-warfare mission package designed for the Common Unmanned Surface Vehicle (CUSV) at Modern Day Marine 2019.

"It's a huge capability," Wayne Prender, senior vice president for Applied Technologies and Advanced Programs at Textron Systems, told on Tuesday.

Read More Show Less
Joel Marrable (Laquna Ross via CNN)

The U.S. Department of Veterans Affairs put on leave an Atlanta-based administrator and reassigned the region's chief medical officer and seven other staff members while it investigates the treatment of a veteran under its care.

Joel Marrable's daughter discovered more than 100 ant bites on her father when she visited him in early September.

The daughter, Laquna Ross, told Channel 2 Action News: "His room had ants, the ceiling, the walls, the beds. They were everywhere. The staff member says to me, 'When we walked in here, we thought Mr. Marrable was dead. We thought he wasn't even alive, because the ants were all over him.'"

Read More Show Less
he amphibious assault ship USS Makin Island (LHD 8) returns to homeport at Naval Base San Diego on February 25, 2015. (U.S. Navy/ Mass Communication Specialist 1st Class Corwin Colbert)

SAN DIEGO, Calif. — A former U.S. Navy sailor was sentenced to 20 years in prison Monday for having sexual contact with a 14-year-old Oceanside girl in 2017, federal prosecutors in San Diego said in a statement.

Read More Show Less

WASHINGTON (Reuters) - Known for acting on impulse, President Donald Trump has adopted an uncharacteristically go-slow approach to whether to hold Iran responsible for attacks on Saudi oil facilities, showing little enthusiasm for confrontation as he seeks re-election next year.

After state-owned Saudi Aramco's plants were struck on Saturday, Trump didn't wait long to fire off a tweet that the United States was "locked and loaded" to respond, and Secretary of State Mike Pompeo blamed Iran.

But four days later, Trump has no timetable for action. Instead, he wants to wait and see the results of investigations into what happened and is sending Pompeo to consult counterparts in Saudi Arabia and the United Arab Emirates this week.

Read More Show Less