b72treadwell,
I knew there was someone else! I'm sorry to hear of your troubles and trust me, I know where you are coming from.
It is absolutely ridiculous the way these payments are handled. The money is never even in the hands of the servicemember and it is still counted as taxable income - which is fundamentally wrong to begin with. They tried to tax me for months I was in Iraq! Although, after vigorous annoyance to the people in DFAS and over at Alexandria, VA Army Human Resources they provided me a corrected W-2 with a combat zone exemption...which didn't matter much in the end because I still had a liability of several thousand.
All in all, it clearly states in Federal Law and Regulations that the Federal Agency is supposed to withhold and pay the federal taxes on these payments. I imagine the reason this has not gone into the court system is due to the short-life of this program in each person's case (three years at most) so they figure they will just have to eat these taxes for lunch over the next two years (I would say three but they don't tell you about the liability, you just find out when you receive a W-2 with no tax withheld).
Like I said, re-introduction of HR 4555 would alleviate this issue. Perhaps this could be an amendment to the legislation Dragonfly is proposing...
I knew there was someone else! I'm sorry to hear of your troubles and trust me, I know where you are coming from.
It is absolutely ridiculous the way these payments are handled. The money is never even in the hands of the servicemember and it is still counted as taxable income - which is fundamentally wrong to begin with. They tried to tax me for months I was in Iraq! Although, after vigorous annoyance to the people in DFAS and over at Alexandria, VA Army Human Resources they provided me a corrected W-2 with a combat zone exemption...which didn't matter much in the end because I still had a liability of several thousand.
All in all, it clearly states in Federal Law and Regulations that the Federal Agency is supposed to withhold and pay the federal taxes on these payments. I imagine the reason this has not gone into the court system is due to the short-life of this program in each person's case (three years at most) so they figure they will just have to eat these taxes for lunch over the next two years (I would say three but they don't tell you about the liability, you just find out when you receive a W-2 with no tax withheld).
Like I said, re-introduction of HR 4555 would alleviate this issue. Perhaps this could be an amendment to the legislation Dragonfly is proposing...