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Fallen Patriots Tax Relief Act

Location: Washington, DC


Mr. GRASSLEY. Mr. President, we are tonight adopting long overdue legislation to rectify a number of inequities faced by members of our Nation's armed services.

Since the terrorist attacks of September 11, these brave men and women have been called upon to make terrific sacrifices. They have left their families and friends behind for months at a time to willingly cast themselves into harm's way. Whether in Afghanistan, Iraq, or on whatever battlefield the war against terrorism must be fought, these courageous patriots have put their lives on the line to defend our freedoms.

While I realize that we could never begin to fully repay these fine young Americans—not to mention the loved ones they leave behind—the Senate has an opportunity tonight to show our gratitude for their sacrifices.

The legislation before us, which the Finance Committee first developed during the 107th Congress, will ensure that members of the uniformed services, the National Guard, and the foreign service are treated fairly in all aspects of the tax code.

First, this legislation ensures that the families of military personnel called into active duty are not disadvantaged under the home sale exclusion. Unlike most Americans, military personnel who are called to active duty or asked to relocate often lack the flexibility to meet residency requirements under the exclusion and are adversely impacted by these rules. This legislation would suspend the residency test for periods of active duty aggregating no more than 10 years.

We should not punish members of our military and their families who are asked to relocate in the name of service to their country.

This legislation also clarifies that dependent care benefits provided to families of the uniformed services will not be treated as taxable compensation. The provision of affordable childcare is an important function of the military during peacetime; but it is never more critical than during periods of conflict—families.

We must also not forget about the increasing role that Reserve and National Guard members fulfill in our Nation's defense. Currently, more than 157,000 reservists and National Guard are on active duty status—most assisting in Operation Iraqi Freedom. We have begun to rely increasingly on these service personnel to defend our borders and to serve and protect in other areas of the world.

This legislation will allow an above-the-line deduction for travel expenses that these men and women incur related to training assignments. This provision will at least partially reimburse national guard members and reservists for the expenses they incur when they travel for weekend drills.

The Armed Forces Tax Fairness Act also ensures that military personnel serving in Secretary of Defense designated "contingency operations" receive appropriate relief from the administrative burdens of our tax laws during participation in those operations.

What's more, this legislation is completely offset. All of the military tax fairness provisions in this legislation are fully funded by extending Customs user fees.

As we consider this legislation tonight, the men and women of our armed forces remain in hostile situations, battling terrorism wherever that battle may lead. At the same time, their loved ones—wives, husbands, parents, children—remain at home, making equally demanding sacrifices as they struggle to make ends meet. It is deeply regrettable that Congress has delayed so long to enact this commonsense legislation.

We must delay no longer. I urge my colleagues to support this legislation to provide the tax relief that our military personnel need and deserve.

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