The New Hampshire Pro Bono Referral Program’s Low Income Taxpayer Project began a veterans’ initiative in September as part of a national effort to spread awareness of tax refunds available to certain veterans under the Combat-Injured Veterans Tax Fairness Act of 2016. The affected veterans are those who were separated from service because of combat injuries between 1991 and 2016 and received a lump-sum disability severance payment.
Although these payments are not taxable, the Defense Finance and Accounting Service withheld federal tax from them for all these years. Unfortunately, most veterans didn’t learn of the problem until after the three-year time limit for claiming refunds had already passed.
To remedy the problem, Congress passed the Combat-Injured Veterans Tax Fairness Act, allowing affected veterans until at least July 2019 to file the necessary amended returns. The minimum amount of refund possible is $1,750; the average so far has been about $5,500. Nationwide, the number of affected veterans is over 130,000, and it’s estimated that over 500 are here in New Hampshire, according to Barbara Heggie, staff attorney and coordinator of the Low Income Taxpayer Project at the New Hampshire Bar Association.
Under direction from Congress, the Department of Defense has identified all the affected veterans and written an explanatory letter to them, with instructions on how to claim the refund. The IRS then mailed the letters to the veterans’ last known address last July. As might be guessed, most of these veterans received the letters, but those most in need of the refund — particularly homeless veterans — are least likely to receive them.
Consequently, the LITP is engaged in extensive outreach efforts to spread the word and is organizing free clinics for eligible veterans in Nashua, Manchester, and Concord. At the clinics, volunteer attorneys and accountants will work with LITP staff to prepare refund claims for the eligible veterans who attend. Heggie has also recorded a PSA on the topic — https://vimeo.com/291500002 — for Concord’s public television station and has given presentations to the CA$H Coalition, the State Veterans’ Advisory Committee, and the North Country Veterans Committee. She will also speak at the biannual North Country Veterans Conference on October 26 in Shelburne, New Hampshire.
The New Hampshire Pro Bono Referral System was awarded an $85,000 grant from the IRS for the Low Income Taxpayer Clinic in 2018. The LITC program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS.
Additional Resources can be found at NH Legal Aid.