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Soldiers Owe the IRS Nearly $400 Million

By Michael Cohn
April 18, 2012

With tax season finally out of the way, attention is now turning to who ends up owing money to the IRS, and a new report indicates that it’s oftentimes the brave members of the U.S. military, through no fault of their own.

Data from the Internal Revenue Service shows that approximately 30,000 active-duty troops and about the same number of reserve members owe a total of about $390 million in back taxes to the IRS, according to the Military Times.

There are good reasons for that number, as many members of the military are forced to move frequently from base to base. Their tax records may not always follow them in time, or documents get mailed to the wrong address. The IRS can have trouble keeping track of where soldiers are posted, and if there’s a problem with a tax return, the notice may go out to the incorrect address.

While troops are allowed a combat tax exclusion that lets them avoid paying taxes for any month while they’re in a combat zone, the rules can be complicated and not always easy to determine.

The ability and opportunity to communicate with an accountant who is qualified to handle tax problems with the IRS while posted abroad is understandably going to be a huge challenge, especially when a soldier is in a combat zone. There are technologies like Skype and email to help facilitate the matter, but sometimes troops need to wait until they get back stateside before they can resolve their tax problems. By then, the penalties and interest could add up substantially.

It seems that this is an obvious case where Congress has a duty to step in and offer tax relief to the members of the military who courageously defend our country while also trying to stay current with their taxes.


To expect Congress to do anything to help out the individuals in the Military is an exercise in futility. Remember the protective vest fiasco during a time of war, even while preparing for the war.

And we a professionals know that the IRS has leeway in how they handle this problem. Perhaps a special group to handle members of the military, same as there is for other favored groups such as members of Congress.

Posted by: | April 19, 2012 2:57 PM

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