Yes he is within the years covered. In fact he received the letter which was how we knew about it. We called the DFAS and they said to get a copy of his DD214 and a copy of his LES and then I guess he refiles for the refund. I am nervous. July is the cut off and we dont live in the USA. We cant get a copy of his taxes he filed and according to the Tax Advocacy people the IRS dont have records for the 1990s either. If that is the case I dont know how they could reject his claim for the basic 1750 dollars. After all, he got the severance, he paid the tax out of it so as far as I am concerned he is owed the money. I am feeling pretty stupid right now because I just dont understand. We are not the only people in this situation.
You are definitely not alone. I too live outside of the US, and I am have not been able to figure this out yet.
Luckily, I will be in the states for a week or so next month and plan to resolve it as best I can while there.