WASHINGTON — For some veterans who were shortchanged millions by the government, it took an act of Congress to finally get the money they were owed.
“It literally takes an act of Congress to try to right this historic wrong that was done to them,” said Thomas Moore, a lawyer with the nonprofit National Veterans Legal Services Program.
For several decades, the government knowingly and wrongfully taxed the severance packages of these veterans who suffered service-ending combat disabilities, Moore said.
“We have estimated that it’s about 14,000 veterans, and the total amount taken from these veterans we’ve estimated as about $78 million,” Moore said.
In an earlier interview, when the bill was being introduced to Congress, Moore said the Department of Defense claimed the severance pay was taxed because their automated payment system was only set up to take taxes out. But even though the government knew about the problem, Moore said, it was never fixed.
Both houses of Congress unanimously passed H.R. 5015, the Combat-Injured Veterans Tax Fairness Act of 2016, before Congress wrapped up its legislative session. Once the bill is signed into law, the veterans will be allowed to file an amended tax return to get their money. The bill will also keep this from happening in the future.
Virginia Sen. Mark Warner, a sponsor of the bill and a member of the Senate Finance Committee, said he takes comfort knowing the bill is heading to the president’s desk to be signed into law.
“It is unbelievable that Congress needed to act to clear up this issue,” Warner said.
Severance pay for military members who suffer combat-related injuries should never be taxed under any circumstance, he said.
Soon, Warner said, the 700 disabled military veterans in Virginia will be able to receive the compensation “they are owed for their courageous sacrifice.”
