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Bill Would Reimburse Combat-Injured Vets for Taxed Severance Pay

Released 3/17/16 at Military.com | Tags: Congressional Legislation

Lawmakers on Thursday filed legislation intended to prevent states from taxing severance pay of combat-injured veterans, which one senator claims has resulted in some $78 million improperly taken from veterans. The money being taxed is the one-time lump sum disability severance pay veterans receive from the Defense Department, a payment that is not supposed to be taxed and would not be but for a glitch with the DoD's automated payment system, according to lawmakers. "Most troubling is that we learned the government had known about this problem for decades yet continued to take this money from thousands of disabled veterans," said Tom Moore, an attorney and manager of the Lawyers Serving Warriors Project at National Veterans Legal Services Program. "The sad truth is that the government essentially stole $78 million from disabled combat veterans because of an accounting problem it's known about for years."

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