[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 294 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 294

   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 20, 2005

  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 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, or
                            ``(iii) is in a missing status as a result 
                        of such service.
                Clause (ii) shall not apply for any month beginning 
                more than 2 years after the date of the termination of 
                combatant activities in such zone.
                    ``(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, 2004.
    (b) Additional Estate Tax not to Apply.--
            (1) In general.--Subsection (b) of section 2201 of such 
        Code is amended by inserting ``or while in service as a 
        civilian employee of the Department of Defense serving in 
        support of the Armed Forces of the United States,'' after 
        ``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 subsection 
        shall apply to decedents dying after December 31, 2004.
    (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 from a civilian employee of the Department of 
        Defense,'' after ``United States''.
            (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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