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20.2.7.7
(08-01-2006)
Combat Zone - Section 7508
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This section provides guidance for identifying and resolving cases for
taxpayers who are or have served in the following:
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In an area designated as a combat zone,
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In a contingency operation designated by the Department of Defense,
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In a qualified hazardous duty area as defined by Congress, or
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In direct support of military operations in a combat zone certified by
the Department of Defense (DOD certified).
Note:
Descriptions of a combat zone or other military service areas are provided
in IRM 25.6.16.1, Combat Zone Overview.
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Combat Zone accounts are identified as follows:
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The literal COMBAT ZONE appears in the entity portion
of CCs ENMOD, IMFOL, SUMRY, TXMOD, TDINQ, MRS and real time transcripts. The
literal remains on the transcript even after the MF freeze code is released.
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A Master File Freeze Code -C is set by TC 150 with Computer Condition
Codes K and Z. It was also set by a Return Processing Code R used only for
the Bosnia conflict.
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TC 500 with any of these closing codes (Closing Codes 52/53, 54/55, 56/57).
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In cycles 200348 and 200349 the systemic download of combat zone information
from Department of Defense started. These transactions have a unique DLN of "28277-999-99999-3"
which is shown on CCs ENMOD or IMFOLE.
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IRM 25.6.16.8 provides a list of combat zones, qualified hazardous duty
areas, and DOD certified areas; the most current list of such areas should
be on the IRS web page (www.irs.gov) for Individuals under "
Tax Information for Members of the U.S. Armed Forces."
20.2.7.7.1
(08-19-2004)
Time Disregarded by Reason of Combat Zone Service
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Combat Zone suspense period begins with the TC 500 cc 52/54/56 (entry)
transaction date and ends with the TC 500 cc 53/55/57 (exit) transaction date,
plus 180 days. The amount of any liability, penalty and underpayment interest
that accrued before the date of entry are not affected by the suspension,
although those amounts cannot be collected until the suspension period ends.
For example:
A 200412 individual return filed on 04–15–2005
with a balance due of $500. Taxpayer entered a combat zone on 07–27–2005.
The liability of $500 plus applicable penalty and underpayment interest up
to 07–26–2005 cannot be collected until the suspension period
ends.
Note:
If taxpayer is hospitalized due to an injury sustained while
in CZ, the time spent in the hospital is also included in the suspension period
above.
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Underpayments:
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Overpayments:
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Allow interest from the due date of the return, without regard to the late return rule (IRC
section 6611(b)(3) ), or the 45 day rule
(IRC section 6611(e) ), for individuals who file timely,
taking into account Sec. 7508 extension provisions.
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Do not enter the Amended Claims Date on ADJ54 when
the Combat Zone Indicator is present.
20.2.7.7.2
(07-31-2001)
Prisoners of War (POW) and Persons Missing in Action (MIA)
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Sec. 7508(d) provides that the period of service
in a combat zone includes the period during which a person is missing in action.
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Sec. 7508(c) allows the spouse of a service person,
entitled to an extension of time for filing and paying taxes, to the same
postponement. This rule does not apply for any spouse for any taxable year
beginning more than two years after the date designated as the termination
date of combat.
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For more information on CZ, see IRMs 3.0.273, 3.11.3, 5.19.1, 25.6.16
and Publication 3.
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