You may qualify for a deferral of the back taxes you owe if you can show that your military service compromised your ability to pay your taxes. The Service Members Civil Relief Act provides this unique benefit to active duty members of the military service that owe back taxes; whether you are in the Navy, Army, Marine Corps, Air Force, Coast Guard, as well as commissioned officers of the uniformed services, such as Public Health Service and the National Oceanic and Atmospheric Administration. With regards to Reservists, it is important to note that Reservists must be placed on active duty to qualify. National Guard personnel not serving in a ?federalized? status are no covered however.



So how does this work exactly? First of all you need to understand that the Government won't just do this for you. You will need to actually apply for it since it is not an automatic process. When you apply you will have to make clear exactly how it is that serving in the military has caused you to become default of your taxes. Keep in mind that the deferral applies to taxes that fall due before or during military service, and extends the payment deadline to six months (180 days) after the military service ends. Also, you won't have to pay interest during this period and there is no accrual of interest during deferment.

In order to defer your back taxes, a taxpayer must also have received a notice of tax due, or have an installment agreement with the IRS, before applying for the deferral. It is often times recommended that a professional Tax Representation Firm handle your IRS back taxes in order to provide you with tax relief, such as an installment agreement, which will then allow you to move forward with your deferral.

There are a few caveats to getting a deferral of your back taxes through the SMCRA however. For one thing, the deferral does not extend the deadline for filing any tax returns. In other words, file your taxes! There are some provisions however that may buy you some time. A couple examples would be that if you are in a combat zone or stationed overseas, you could then apply for an extension. Of course even more questions arise from what exactly is considered a combat zone, what if you fly over a combat zone, etc. Clearly having legal representation can make your life a lot easier when trying to decide whether or not you qualify. It can get even more complicated when determining how much of your gross income is taxable. In short however, if you serve in a combat zone as an enlisted person or as a warrant officer (including commissioned warrant officers) for any part of a month, all your military pay received for military service that month is excluded from gross income. For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.

As you can see, the Service Members Civil Relief Act can assist you in receiving tax relief by providing these benefits and more, but only if you apply and qualify. One thing is for certain, if you do nothing, then you'll never know. If you are in the military, then you have additional rights as a tax payer. Make sure to do something about it and take advantage of the benefits that you most certainly deserve.