Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I am having difficulty getting the IRS to recognize and pay…

Customer Question
I am having difficulty getting...
I am having difficulty getting the IRS to recognize and pay the retroactive tax on my Combat Related Special Compensation (CRSC). In my case, it is retroactive to 2011 and I sent IRS that amended tax return in October, 2014, and the others in February of 2015. I included the USAF, DFAS and VA letters confirming my CRSC and disability. I have talked to the IRS several times and they recently sent me a letter asking for amended 1099Rs, which DFAS will not provide. The last time I talked to an IRS lady, she said she had been there for 10 years and had never heard the term, "Strickland Decision." I have cancer related to Agent Orange exposure from my PCS in Vietnam. I am pretty much at my wits end. I am thinking that I may need to go to my congressman to get action. If anyone has a course of action short of that, I would appreciate knowing about it.
Wits End.
Submitted: 3 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 10 minutes by:
6/1/2015
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,888
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified
Hi,
This is typical.
I think this can best be handled through what's called a claim of right (IRC section 1341).
Are you saying that you paid tax on pension income during the time the CRSC was being processed and then the pension was paid back, making that and future income being NON-taxable?
Give me a little more detail and we can go from there ...
Lane
Ask Your Own Tax Question
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 years ago
P.S.
I just found this in the Internal Manual of IRS.
Combat Related Special Compensation (CRSC) and Concurrent Receipt of Disability Pay (CRDP) are programs managed by the Army, Navy, Air Force or Marines for retired veterans. CRSC payments are non-taxable ... The taxpayer must attach the Defense Finance and Accounting Service (DFAS) Letter and the appropriate copies of the Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA's, Insurance Contracts, etc., to claim a refund of taxes paid on the excludable amount, before adjusting the military retirement pay from taxable to non-taxable.
Note that this says nothing about an AMENDED 1099-R.
I had a client that had what I think is a similar issue. OAS would NOT amend the 1099-R to say nothing was distributed from the pension ... BUT the did put an asterisk on the 1099-R that said that the client had the credit AGAINST this income available, under Section 1341.
IRS front lines also kicked this back, and she ended up going to the taxpayer advocate and presenting this under section 1341, and eventually three years of refund were generated.
She was able to get hold of someone in the Legal area of IRS and was made aware of the ability to do this... Later when trying to get it done, the front lines told here that Legal was only there for certain months of the year, and that the credit could only be done in the year paid back (rather than applying retroactively to the three years she had paid tax on the pension while the disability claim was being processed).
But by preparing the case and pushing it through both appeals and the taxpayer advocate service she was refunded the tax paid on that pension, because the pension was paid back by the department issuing the disability payments (because it was retroactive)
Again let me know if I've understood your questions correctly and we can go from there...
Lane
Ask Your Own Tax Question
Customer reply replied 3 years ago
Thanks, Lane.
I am getting a disability pension which is non-taxable back to March 1, 2011 when I first received the VA ruling of cancer caused by Agent Orange. This Combated Related Service Compensation (CRSP) and the Strickland Ruling allow me to retroactively count that amount as non-taxable back to that 2011 date. Thus, I have submitted the three (2011, 2012 and 2013) 1040Xs with attached documentation. I appreciate the information that you sent me about a lady who was able to get the IRS to finally act using the advocate. I have the advocate phone number (from the IRS) and there is one in Denver, where I live. I will make that contact and see where it goes. This area of VA compensation and disability is so complex that not even the Defense Finance and Accounting Service (DFAS) or the IRS really understand it unless you talk to someone who has worked with it in the past. I am going to try the advocate. In the mean time, If you have any additional suggestions, please email me at***@******.***. Thank you so much.
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 years ago
I will... In a meeting right now but this is SOMEWHAT similar, in that there IS a facility for this being changed to non-taxable .. Let me do a little homework and I'll send an an email with what I find I the manual about changing this to non taxable ...I'm really thinking that this is an advocate and possibly an appeals issue.
The folks in the collections division (front lines) wren' really equipped
Lane
Ask Your Own Tax Question
Customer reply replied 3 years ago
Thanks, ***** ***** will get back to you with any progress.
Dale
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 3 years ago
Thanks.
Go here:
http://www.irs.gov/irm/part21/irm_21-006-006r.html
This is the IRS "internal" manual
Search for CRSC
One of the things you'll see is this:
Combat Related Special Compensation (CRSC) and Concurrent Receipt of Disability Pay (CRDP) are programs managed by the Army, Navy, Air Force or Marines for retired veterans. CRSC payments are non-taxable and CRDP payments are taxable. The taxpayer could be eligible for both payments, they must elect which payment they want since payment of both benefits is prohibited by law. The taxpayer must attach the Defense Finance and Accounting Service (DFAS) Letter and the appropriate copies of the Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA's, Insurance Contracts, etc., to claim a refund of taxes paid on the excludable amount, before adjusting the military retirement pay from taxable to non-taxable.
If you feel I've helped so far ... would appreciate a positive rating using the stars or faces on your screen.
That's the ONLY way they will crdit me for the efforts here.
Thanks,
Lane
Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,888
14,888 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I am a disabled veteran and I wish to deduct the amount of
I am a disabled veteran and I wish to deduct the amount of my disability from my military retirement? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
Robbin. Trying to understand if I qualify for the net tax
Trying to understand if I qualify for the net tax disability exclusion … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
If I filed my taxes and they were accepted and being
If I filed my taxes and they were accepted and being processed then I received a letter I had Obama care for 3 months but the rest I had insurance from my job I fax the letter back to the irs how much… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I'm sure this question has been asked several times now, but
Hello, I'm sure this question has been asked several times now, but I really can't find a concrete answer to the question. I served 20 years in the military and retired. My ex spouse and I divorced af… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Answer the question asked. Can I off set 1099C income from a
Answer the question asked. Can I off set 1099C income from a deed in lieu of by filing a capital loss on the ptoperty … read more
abci168
abci168
Principal
27 satisfied customers
I am active duty military. I was stationed in Saudi Arabia
I am active duty military. I was stationed in Saudi Arabia (tax free zone) from 7 Aug 2014 to 8 Sept 2016. I filed my 2014 and 2015 taxes while I was over there. I just got a letter in the mail from t… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
Hi Robin, I have the similar issue as of Anne. I was active
Hi Robin, I have the similar issue as of Anne. I was active duty in the Army for 15 yrs and 4 months. I recieved the severance disability pay of 58,816.80. It was taxed 25 peercent. The left me with 4… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
The IRS owes me a very large (six figures). however
The IRS owes me a very large refund (six figures). however someone filed a false tax return in my name for the year in question and has caused the IRS to delay sending the refund. I was told by the IR… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
The VA retroactively used my Air Force Retirement Pay for 2011
The VA retroactively used my Air Force Retirement Pay for 2011 in 2012 as compensation for the VA award. I asked the USAF finance department then if a corrected 1099R would be issued and they reply no… read more
Lane
Lane
JD, CFP, MBA, CRPS
Doctoral Degree
14,888 satisfied customers
I am a disabled retired Army Veteran. Last year I applied for
I am a disabled retired Army Veteran. Last year I applied for CRSC pay and was approved retroactive to Mar 01, 2005. It was my understanding that I could file an amended tax return using IRS for 1040X… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Hi, Ive been trying to find out how to recoup my taxes paid
Hi, I've been trying to find out how to recoup my taxes paid on my severance pay I received after being seperated from the military when I found a question you had answered and wondering if the info i… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
Im retired from the USAF. USAF informed me that due to an
I'm retired from the USAF. USAF informed me that due to an administrative system problem my 1099 would show 13 months pay even though i only received 12 months pay. I was told that a procedure had bee… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
I just received a 100% Disability Rating advisory from the
I just received a 100% Disability Rating advisory from the VA and as part of the instructions attached they advised me to ask how my retirement pay from the USAF and my VA Compensation will be taxed. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I am 76 yeard old, my wife 74. I am US military retired. For
I am 76 yeard old, my wife 74. I am US military retired. For the tax year 2009, is my military retirement income ($18,936.00) tax exempt? Also, I am 100% disability rated by the Veterans Administratio… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
Do I have to show disability income on 1040? Do I have to
Do I have to show disability income on 1040? Do I have to show VA disability on 1040? I do not have 1099's for this income, so should I just show income that is taxable.… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
My husband is self employed and we filed form 1040 for 2007
My husband is self employed and we filed form 1040 for 2007 tax year. We then noticed our cpa did not include some of our deductions. She filed form 1040x and it reduced our tax liability. The irs den… read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
Dear Ed Johnson, I have an other question. I enjoyed the last
Dear Ed Johnson, I have an other question. I enjoyed the last comversation with you about couple of weeks and if it posible and if you know the answer I would like to work with you again, Thank you, T… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
I am going to be receiving approximately $25,000 in ...
I am going to be receiving approximately $25,000 in Compensation from Veterans Administration for a Vietnam related illness. Cancer from Agent Orange. When I do my taxes at the end of the year.......a… read more
Mic
Mic
CEO
Working on PhD in Hypnotherapy
174 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x