[Congressional Record Volume 151, Number 20 (Monday, February 28, 2005)]
[Senate]
[Page S1797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Mr. Lott, Mr. Roberts, Ms. 
        Snowe, Mr. Bayh, Mr. Chambliss, Ms. Mikulski, Mr. Corzine, Mr. 
        Levin, Mr. DeWine, Mr. Wyden, Mr. Bond, Mrs. Feinstein, Mr. 
        Hagel, and Mr. Hatch):
  S. 469. A bill to amend the Internal Revenue Code of 1986 to exclude 
from gross income the gain from the sale of a principal residence by 
certain employees of the intelligence community; to the Committee on 
Finance.
  Mr. ROCKEFELLER. Mr. President, today I am introducing legislation to 
extend an important tax benefit to the men and women of the United 
States Intelligence Community. I am pleased that in keeping with the 
bipartisan traditions of the Intelligence Committee, every member, 
Republican and Democrat, is listed as an original cosponsor.
  Two years ago, on Veterans Day, President Bush signed into law an 
important modification to our tax code to ensure that it does not 
punish those who serve our country in the military and in the U.S. 
foreign service. Unfortunately, that legislation did not extend to 
intelligence officers, who serve alongside their military and 
diplomatic colleagues all around the world and who often face the same 
tax issues encountered by those individuals. The legislation I am 
introducing today makes a common sense modification to the capital 
gains tax exclusion rules to ensure that when selling their homes, 
intelligence officers do not pay more tax than they would if they did 
not serve their country.
  The men and women of the Intelligence Community, serve with the 
military in Iraq, Afghanistan, Korea, and numerous other locations 
where we have U.S. forces deployed. They also serve in U.S. Embassies 
around the world. Often times they carry an added burden because they 
must serve undercover. Their families and friends don't know what they 
do. They live their cover story by day and perform their critical 
intelligence work by night. They work for all fifteen of the agencies 
included in the intelligence community and they do a remarkable job. 
These people are dedicated to their mission and to this country.
  These patriotic individuals sacrifice a great deal on behalf of the 
rest of us. They uproot and relocate their families every few years. 
They often live in places most of us wouldn't even visit. And they 
rarely have the quality of life with access to modern luxuries that the 
rest of us take for granted. To then say that they are going to be 
penalized by our tax code is unacceptable.
  Since 1997, our tax code has allowed Americans to sell their homes 
without paying taxes on up to $250,000 of capital gains. Married 
couples can exclude $500,000 in capital gains from taxation. This 
provision is specifically intended only for principle residences, and 
therefore, sellers are required to have lived in the homes for at least 
2 of the 5 years prior to sale.
  In 2003, Congress recognized that this residency requirement was 
often difficult for members of the armed forces and foreign service to 
satisfy. If they had been stationed away from home while serving their 
country, they were essentially punished with higher taxes on the sales 
of their homes. Congress addressed this injustice by allowing service 
personnel and foreign service officers who were stationed away from 
home to suspend the residency requirement for as many as ten years. 
This change allows, for example, a soldier who spent the last 7 years 
stationed in Germany to exclude from taxes the capital gains on the 
sale of his former home in the U.S., as long as he had lived in it for 
at least 2 of the 5 years prior to his service overseas. The change is 
effective on all sales after 1997, when the capital gains tax exclusion 
for home sales was provided to all Americans.
  Fairness demands that Congress apply the same rules to intelligence 
officers serving their country away from home. My legislation simply 
inserts intelligence officers into the list of those allowed to suspend 
the 5 year residency test period for up to 10 years while they are 
stationed away from home.
  I intend to work with my colleagues on the Intelligence Committee and 
the Finance Committee to ensure that this provision is enacted this 
year.
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