Refund penalties for combat zone worker

[MarkCTX]

Taxpayer is a civilian who worked in a combat zone, Afghanistan. He was assessed and paid failure to pay penalties last year. Can he claim refunds for those penalties under Section 7508? Anybody have any experience with this issue?

[New York Enrolled Agent]

Taxpayer is a civilian who worked in a combat zone, Afghanistan. He was assessed and paid failure to pay penalties last year. Can he claim refunds for those penalties under Section 7508? Anybody have any experience with this issue?

§7508 requires service as a member of the armed forces or be a taxpayer who serves in support of the Armed Forces. Does your taxpayer satisfy the IRS interpretation?

This is part of IRM 5.1.7.9

A. Serving in the United States Armed Forces (Armed Forces) or in support of the Armed Forces in an area designated as a "combat zone" by the President of the United States (President) in an Executive Order.
B. Serving in the Armed Forces or in support of the Armed Forces when deployed outside the United States away from the individual's permanent duty station while participating in an operation designated as a "contingency operation" by the Secretary of Defense.
C. Serving in the Armed Forces in an area designated by Congress as a "qualified hazardous duty area."
D. The spouses of combat zone personnel listed under (a) (b), and (c) above. This does not apply if the individual considered as combat zone personnel is hospitalized inside the United States.


6. Individuals who serve in support of the Armed Forces in a combat zone also receive the postponement period under IRC 7508. These individuals include the following:

•Merchant Marines serving aboard vessels under the operation and control of the Department of Defense

•Red Cross personnel

•Accredited Correspondents

•Civilian personnel acting under the direction of the Armed Forces in support of those Forces

[MarkCTX]

I don't have a document showing his exact role. He says he worked with the military and was in one convoy that was attacked.

[Roland Slugg]

I have no direct experience with the issue, but upon reading Code §7508 it would appear that your client may qualify. Afghanistan has, indeed, been a presidentially declared combat zone since September 19, 2001. If you and your client believe he does qualify for the §7508 relief, you may wish to read the following information regarding how to submit a claim:

http://www.irs.gov/uac/Questions-&-Answers-on-Combat-Zone-Tax-Provisions

[MarkCTX]

Thanks Roland. I ran across this piece before I posted. I think he qualifies, and I'm moving forward on that assumption.

Mark C.

[taxea]

I don't have a document showing his exact role. He says he worked with the military and was in one convoy that was attacked.

ask for a copy of his employment contract