Disabled Veterans Tax Fairness Act of 2007

Disabled Veterans Tax Fairness Act of 2007 - Amends the Internal Revenue Code to allow members of the uniformed services whose retired pay in any taxable year is reduced due to an award of disability compensation by the Department of Veterans Affairs an extension of the three-year limitation period for filing tax refund claims until one year after the date of a disability determination. Limits the period for which such refund claims may be filed to taxable years beginning less than 15 years before the date of a disability determination.

[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2234 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 2234

To amend the Internal Revenue Code of 1986 to provide for an extension 
 of the period of limitation to file claims for refunds on account of 
    disability determinations by the Department of Veterans Affairs.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 9, 2007

 Mr. Farr (for himself and Mr. Filner) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for an extension 
 of the period of limitation to file claims for refunds on account of 
    disability determinations by the Department of Veterans Affairs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Disabled Veterans Tax Fairness Act 
of 2007''.

SEC. 2. SPECIAL PERIOD OF LIMITATION WHEN UNIFORMED SERVICES RETIRED 
              PAY IS REDUCED AS A RESULT OF AWARD OF DISABILITY 
              COMPENSATION.

    (a) In General.--Subsection (d) of section 6511 of the Internal 
Revenue Code of 1986 (relating to special rules applicable to income 
taxes) is amended by adding at the end the following new paragraph:
            ``(8) Special rules when uniformed services retired pay is 
        reduced as a result of award of disability compensation.--
                    ``(A) Period of limitation on filing claim.--If the 
                claim for credit or refund relates to an overpayment of 
                tax imposed by subtitle A on account of--
                            ``(i) the reduction of uniformed services 
                        retired pay computed under section 1406 or 1407 
                        of title 10, United States Code, or
                            ``(ii) the waiver of such pay under section 
                        5305 of title 38 of such Code,
                as a result of an award of compensation under title 38 
                of such Code pursuant to a determination by the 
                Secretary of Veterans Affairs, the 3-year period of 
                limitation prescribed in subsection (a) shall be 
                extended, for purposes of permitting a credit or refund 
                based upon the amount of such reduction or waiver, 
                until the end of the 1-year period beginning on the 
                date of such determination.
                    ``(B) Limitation to 15 taxable years.--Subparagraph 
                (A) shall not apply with respect to any taxable year 
                which began more than 15 years before the date of such 
                determination.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to claims for credit or refund filed after the date of the 
enactment of this Act.
    (c) Transition Rules.--In the case of a determination described in 
paragraph (8) of section 6511(d) of the Internal Revenue Code of 1986 
(as added by this section) which is made by the Secretary of Veterans 
Affairs after December 31, 1989, and before the date of the enactment 
of this Act, such paragraph--
            (1) shall not apply with respect to any taxable year which 
        began before December 31, 1989, and
            (2) shall be applied by substituting ``the date of the 
        enactment of the Disabled Veterans Tax Fairness Act of 2007'' 
        for ``the date of such determination'' in subparagraph (A) 
        thereof.
                                 <all>