[Senate Report 114-18]
[From the U.S. Government Publishing Office]


                                                        Calendar No. 41
                                                        
114th Congress         }                      {       Report
                                 SENATE
 1st Session           }                      {       114-18
======================================================================
 
                 WOUNDED WARRIOR TAX EQUITY ACT OF 2015

                                _______
                                

                 April 14, 2015.--Ordered to be printed

                                _______
                                

               Mr. Hatch, from the Committee on Finance, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 907]

    The Committee on Finance, having considered an original 
bill, S. 907, to amend the Internal Revenue Code of 1986 to 
prevent the extension of the tax collection period merely 
because the taxpayer is a member of the Armed Forces who is 
hospitalized as a result of combat zone injuries, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
 I. LEGISLATIVE BACKGROUND............................................1
II. EXPLANATION OF THE BILL...........................................2
        A. Truncate the Collection Period for Taxpayers 
            Hospitalized for Combat Zone Injuries (sec. 2 of the 
            bill and secs. 6502 and 7508(e) of the Code).........     2
III.BUDGET EFFECTS OF THE BILL........................................3

IV. VOTES OF THE COMMITTEE............................................3
 V. REGULATORY IMPACT AND OTHER MATTERS...............................4
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............4

                       I. LEGISLATIVE BACKGROUND

    The Committee on Finance, having considered S. 907, the 
``Wounded Warrior Tax Equity Act of 2015,'' to amend the 
Internal Revenue Code of 1986 to prevent the extension of the 
tax collection period merely because the taxpayer is a member 
of the Armed Forces who is hospitalized as a result of combat 
zone injuries, reports favorably thereon without amendment and 
recommends that the bill do pass.

Background and need for legislative action

    Background.--Based on a proposal recommended by Senators 
Cornyn and Casey, the Committee on Finance marked up original 
legislation (a bill to amend the Internal Revenue Code of 1986 
to prevent the extension of the tax collection period merely 
because the taxpayer is a member of the Armed Forces who is 
hospitalized as a result of combat zone injuries) on February 
11, 2015, and, with a majority present, ordered the bill 
favorably reported.
    Need for legislative action.--The Committee believes that 
it is important to protect combat troops from an extension of 
IRS collection activity merely because the taxpayer is a member 
of the Armed Forces who is hospitalized as a result of combat 
zone injuries. The Committee notes that, in some cases, 
civilians may receive the benefit of IRS administrative 
discretion to suspend collection activity during periods of 
hospitalization without those civilians having to agree to an 
extension of IRS collection activity beyond ten years. Thus, 
the Committee believes the suspension of the collection statute 
is unnecessary in the case of hospitalized members of the Armed 
Forces.

                      II. EXPLANATION OF THE BILL


A. Truncate the Collection Period for Taxpayers Hospitalized for Combat 
  Zone Injuries (sec. 2 of the bill and secs. 6502 and 7508(e) of the 
                                 Code)


                              PRESENT LAW

    The Code provides active duty military and civilians in 
designated combat zones additional time in which to file tax 
returns, pay tax liabilities and take other actions required in 
order to comply with their tax obligations.\1\ A commensurate 
amount of time is provided for the IRS to complete actions 
required with respect to assessment and collection of the 
obligations of such active duty military and civilian 
taxpayers. The additional time provided equals the actual time 
in duty status, which includes hospitalization resulting from 
service, plus 180 days. In other words, in determining how much 
time remains in which to perform a task required by the Code, 
both the taxpayer and the IRS may disregard the period of 
active duty.
---------------------------------------------------------------------------
    \1\Sec. 7508. Unless otherwise stated, all section references are 
to the Internal Revenue Code of 1986, as amended (the ``Code'').
---------------------------------------------------------------------------
    The Code provides that collection activities generally may 
only occur within ten years after assessment.\2\ The effect of 
the provisions described above is to extend the 10-year 
collection period for combat zone taxpayers.
---------------------------------------------------------------------------
    \2\Sec. 6502.
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee believes that it is important to protect 
combat troops from an extension of IRS collection activity 
merely because the taxpayer is a member of the Armed Forces who 
is hospitalized as a result of combat zone injuries. The 
Committee notes that, in some cases, civilians may receive the 
benefit of IRS administrative discretion to suspend collection 
activity during periods of hospitalization without those 
civilians having to agree to an extension of IRS collection 
activity beyond ten years. Thus, the Committee believes the 
tolling of the collection statute of limitations period is 
unnecessary in the case of hospitalized members of the Armed 
Forces.

                        EXPLANATION OF PROVISION

    Under the provision, the collection period for taxpayers 
hospitalized for combat zone injuries shall not be suspended by 
reason of any period of continuous hospitalization or the 180 
days after hospitalization. Accordingly, the collection period 
expires 10 years after assessment, plus the actual time spent 
in a combat zone, regardless of the length of the postponement 
period available for hospitalized taxpayers to comply with 
their tax obligations.

                             EFFECTIVE DATE

    The provision applies to taxes assessed before, on, or 
after the date of the enactment of this Act.

                    III. BUDGET EFFECTS OF THE BILL


                         A. Committee Estimates

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 308(a)(1) of the 
Congressional Budget and Impoundment Control Act of 1974, as 
amended (the ``Budget Act''), the following statement is made 
concerning the estimated budget effects of the revenue 
provisions of the ``Wounded Warrior Tax Equity Act of 2015'' as 
reported.
    The bill is estimated to reduce Federal fiscal year budget 
receipts by less than $500,000 for the period 2015-2025.

                B. Budget Authority and Tax Expenditures


Budget authority

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that the provisions of the bill as reported do 
not involve new or increased budget authority.

Tax expenditures

    In compliance with section 308(a)(2) of the Budget Act, the 
Committee states that certain provisions of the bill as 
reported affect the levels of tax expenditures (see part A., 
above).

            C. Consultation With Congressional Budget Office

    In accordance with section 403 of the Budget Act, the 
Committee advises that the Congressional Budget Office has not 
submitted a statement on the bill. The letter from the 
Congressional Budget Office will be provided separately.

                       IV. VOTES OF THE COMMITTEE

    In compliance with paragraph 7(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, with a 
majority present, the ``Wounded Warrior Tax Equity Act of 
2015,'' was ordered favorably reported by voice vote on 
February 11, 2015.

                 V. REGULATORY IMPACT AND OTHER MATTERS


                          A. Regulatory Impact

    Pursuant to paragraph 11(b) of rule XXVI of the Standing 
Rules of the Senate, the Committee makes the following 
statement concerning the regulatory impact that might be 
incurred in carrying out the provisions of the bill.

Impact on individuals and businesses, personal privacy and paperwork

    The bill provides that the ten year collection period for 
taxpayers hospitalized for combat zone injuries is determined 
without regard to any period of continuous hospitalization. The 
provisions of the bill are not expected to impose additional 
administrative requirements or regulatory burdens on 
individuals or businesses.
    The provisions of the bill do not impact personal privacy.

                     B. Unfunded Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the tax provisions of the 
reported bill do not contain Federal private sector mandates or 
Federal intergovernmental mandates on State, local, or tribal 
governments within the meaning of Public Law 104-4, the 
Unfunded Mandates Reform Act of 1995.

                       C. Tax Complexity Analysis

    Section 4022(b) of the Internal Revenue Service Reform and 
Restructuring Act of 1998 (``IRS Reform Act'') requires the 
staff of the Joint Committee on Taxation (in consultation with 
the Internal Revenue Service and the Treasury Department) to 
provide a tax complexity analysis. The complexity analysis is 
required for all legislation reported by the Senate Committee 
on Finance, the House Committee on Ways and Means, or any 
committee of conference if the legislation includes a provision 
that directly or indirectly amends the Internal Revenue Code 
and has widespread applicability to individuals or small 
businesses. The staff of the Joint Committee on Taxation has 
determined that there are no provisions that are of widespread 
applicability to individuals or small businesses.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate, to dispense with the 
requirements of paragraph 12 of rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

                                  [all]