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Combat Wounded Vets Could See Big Payouts Thanks To Congressional Tax Fix

Ruth Hedlund, a member of Women Accepted for Volunteer Emergency Services (Waves) National, enjoys lunch with a friend. WAVES National (established in 1979) is a Sea Service women's organization for women who have served or are currently serving in one of the sea services; U.S. Navy, U.S. Marine Corps, U.S. Coast Guard or Reserves. Women veterans from all over the North Midwest gathered at the Veterans Affairs Medicial Center in Minneapolis, Minn. on Oct 10. The mission of the Minnesota Women Veterans program is to ensure women veterans have equitable access to federal and state benefits and services. The program ensures response to the gender specific needs of women veterans and that women veterans are treated with dignity and respect. It provides outreach events to improve awareness of available benefits, services, and eligibility criteria for the women who served the United States Armed Forces under other than dishonorable conditions. The Women Veterans Coordinator collaborates with federal, state and local agencies pertinent to women veterans; coordinates and performs outreach events to improve benefits and services available; assesses the needs of Minnesota Women Veterans and provides recommendations for benefits and service improvements to the Commissioner of Veterans Affairs. For more information about the local chapters visit:
December 16, 2016

The Combat-Injured Veterans Tax Fairness Act of 2016 is expected to be singed into law by President Barack Obama before he leaves office. If passed, the act will force the Department of Defense to stop improperly taxing severance payouts for troops that were wounded in war zones. It will also require Pentagon officials to identify any veterans who have been improperly taxed. This could lead to big payout for veterans that may not even know they have been improperly taxed and are owed money.

Officials from the the National Veterans Legal Services Program have been fighting to change the current system for years. Current federal law offers a lump-sum disability severance payment to service members that were the victims of combat-related injuries and are separated from the military. However, the Pentagon has routinely been taking the severance pay of soldiers for years despite warnings from the National Veterans Legals Services Program.

Tom Moore, an attorney at NVLSP, states that over $78 million has been wrongfully taken from veterans over the past decade. Up to 14,000 living veterans may benefit from the policy change. Some of these veterans may soon receive payments worth tens of thousands of dollars.

Current federal law gives veterans that were wrongfully taxed up to three years to recover the money through amended tax returns. However, the responsibility of noticing the error has been left up to veterans. If a veteran was wrongfully taxed and was unaware no action would be taken to correct the error. The new policy change erases the three year window. Allowing all veterans who were wrongfully taxed to claim the full amount of their disability severance pay.

Pentagon officials will have just one year to review all lump-sum disability payments over the last 25 years to determine if any veterans are owed money under the new legislation.