(Washington, DC): -- In a bipartisan effort to correct an unfair section of the tax code and ensure fair treatment for U.S. military personnel, Congressman Bob Ney (R-OH) and Congressman Michael R. McNulty (D-Green Island) announced today that they are introducing the Fallen Heroes Tax Fairness Act of 2006. This bipartisan legislation is aimed at correcting an unfair section of the tax code that grants greater tax exemption benefits to civilians who die from acts of terrorism than to America's military personnel who are killed in combat fighting for our country.

"Our fallen soldiers should be treated like the American heroes that they are and not like the second-class citizens that the IRS tax code currently treats them as," Congressman Ney said today. "This is an outrageous discrepancy that must be corrected immediately. I am pleased to have the support of my Democrat colleague, Congressman McNulty who is a respected Member of the Ways & Means Committee, and we will be working hard in the days ahead to gather the bipartisan support of our colleagues in the House in order to move this forward as quickly as possible. This unfair treatment of America's heroes should not be allowed to continue any longer."

Congressman McNulty said, "This is simply a case of doing the right thing. The families of American soldiers killed in action face challenges beyond mourning the loss of their loved one. Often, they experience economic turmoil due to lost income and unexpected financial costs. The Fallen Heroes Tax Fairness Act will ease this burden by providing military personnel killed in combat with the same two-year tax exemption as civilians."

McNulty added, "I am very pleased to join Congressman Ney in introducing this legislation, in honor of those brave men and women of our Armed Forces who have already given their lives, and those who put their lives on the line for us, day in and day out, around the globe."

Background:

• Under Internal Revenue Code Section 692, civilians who die from acts of terrorism can receive greater tax exemption benefits than military personnel who are killed in combat fighting for their country.

• Current tax law grants civilians who are victims of terrorism an automatic two-year tax exemption. This exemption applies for the year of death and the year prior to death. It is being applied for civilians killed in Iraq.

• If an American soldier is killed in combat, the soldier does not receive the same automatic two-year tax exemption given to civilians. The soldier only receives a tax exemption for the year(s) that the soldier is actually in the combat zone.

For example, under current law:

• If a civilian is killed after having been in Iraq only during calendar year 2005, he/she receives a tax exemption for both 2005 and 2004 -- the year of death and the year prior to death.

• If an active duty soldier is killed after having been in Iraq only during calendar year 2005, he/she receives a tax exemption for 2005 but does not receive the tax exemption for 2004 -- only for the year that he/she is actually in the combat zone and not the prior year.

• If an active duty soldier arrives in Iraq during calendar year 2004, remains in Iraq, and is killed in calendar year 2005, he/she receives the tax exemption for both 2004 and 2005 -- again, only for the years that he/she is actually in the combat zone.

The Fallen Heroes Tax Fairness Act of 2006 would correct this discrepancy and ensure that America's military heroes are allowed the same automatic two-year tax exemption as civilians -- for the year of death and the year prior to death.

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