Representative Scott DesJarlais (TN-04) has introduced H.R.5044, the Andrew P. Carpenter Tax Act.
Lance Corporal Andrew P. Carpenter of Columbia, Tennessee lost his life on February 19, 2011, while serving his country in Afghanistan. Three years prior, Andrew had taken out a private educational loan. After learning that he had been killed in action, the company administering the loan agreed to completely forgive the debt. Upon forgiveness of the debt, the family received a 1099-C form from the Department of Education informing them that the debt discharged would be factored into their gross taxable income for that year.
This legislation would amend the Internal Revenue Code by exempting student loan forgiveness from being categorized as gross taxable income for families of veterans who have lost their life while serving on active duty in the United States Armed Forces.
"I am humbled to have the honor of working with the Carpenter family to introduce this legislation," said Representative DesJarlais. "It is a fitting way to fix a glaring problem in our tax code, while paying tribute to the memory of Lance Corporal Carpenter. His family has experienced the pain of losing their son, husband and father. Hopefully, if passed this measure will in some way ease this burden."
It is important to note that this bill would not make it mandatory for private lenders to forgive education loans. Private loan companies would still have the option of whether or not to forgive a loan, and federally backed loans are already forgiven for deceased veterans under the Higher Education Act. This legislation would simply prevent the IRS from collecting taxes on any amount of loan forgiveness.
The Andrew P. Carpenter Tax Act would have a retroactive effective date of October 7, 2001, the start of Operation Enduring Freedom.