[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 351 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 351

   To amend the Internal Revenue Code of 1986 to extend to civilian 
employees of the Department of Defense serving in combat zones the tax 
  treatment allowed to members of the Armed Forces serving in combat 
                                 zones.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 31, 2001

  Mr. Hefley 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 extend to civilian 
employees of the Department of Defense serving in combat zones the tax 
  treatment allowed to members of the Armed Forces serving in combat 
                                 zones.

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

SECTION 1. TAX TREATMENT OF CIVILIAN EMPLOYEES OF DEPARTMENT OF DEFENSE 
              IN COMBAT ZONES.

    (a) Exclusion of Combat Zone Compensation.--
            (1) In general.--Subsection (d) of section 112 of the 
        Internal Revenue Code of 1986 (relating to prisoners of war, 
        etc.) is amended by adding at the end the following new 
        paragraph:
            ``(4) Civilian employees of department of defense.--
                    ``(A) Service in combat zone.--Gross income does 
                not include so much of the compensation as does not 
                exceed the maximum enlisted amount received for active 
                service as a civilian employee of the Department of 
                Defense serving in support of the Armed Forces of the 
                United States for any month during any part of which 
                such employee--
                            ``(i) served in a combat zone,
                            ``(ii) 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, or
                            ``(iii) is in a missing status as a result 
                        of such service.
                    ``(B) Missing status.--For purposes of this 
                paragraph, the terms `active service' and `missing 
                status' have the respective meanings given to such 
                terms by section 5561 of title 5 of the United States 
                Code.''.
            (2) Clerical amendments.--
                    (A) The heading for section 112 of such Code is 
                amended to read as follows:

SEC. ``112. CERTAIN COMBAT ZONE COMPENSATION.''.

                    (B) The item relating to section 112 in the table 
                of sections for part III of subchapter B of chapter 1 
                of such Code is amended to read as follows:

                              ``Sec. 112. Certain combat zone 
                                        compensation.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2000.
    (b) Additional Estate Tax Not To Apply.--
            (1) In general.--Section 2201 of such Code is amended by 
        inserting ``or, as a civilian employee of the Department of 
        Defense serving in support of the Armed Forces of the United 
        States,''.
            (2) Clerical amendments.--
                    (A) The heading for section 2201 of such Code is 
                amended by inserting ``AND DEPARTMENT OF DEFENSE 
                CIVILIANS'' after ``MEMBERS OF THE ARMED FORCES''.
                    (B) The item relating to section 2201 in the table 
                of sections for subchapter C of chapter 11 of such Code 
                is amended to read as follows:

                              ``Sec. 2201. Members of the Armed Forces 
                                        and Department of Defense 
                                        civilians dying in combat zone 
                                        or by reason of combat-zone-
                                        incurred wounds, etc.''.
            (3) Effective date.--The amendments made by this section 
        shall apply to decedents dying after December 31, 2000.
    (c) No Tax on Toll Telephone Service in Combat Zone.--
            (1) In general.--Subsection (d) of section 4253 of such 
        Code (relating to servicemen in combat zone) is amended by 
        inserting ``or, a civilian employee of the Department of 
        Defense,''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply with respect to amounts paid after the date of the 
        enactment of this Act for services rendered on or after such 
        date.
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