Rev. Proc. 57-25

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to prescribe policy and procedure for the defendant of the collection of income tax assessments made against persons currently in the Armed Forces of the United States.

SEC. 2. DEFINITION.

The term `initial period of service' as used in this Revenue Procedure means the period of active duty for which a taxpayer is inducted into the military service under any selective service act; the period of active duty under the first enlistment of a taxpayer in the armed service; or the period of service, prior to any reenlistment, following recall of the taxpayer to active duty from an inactive reserve or National Guard unit or the first period of reenlistment, for a taxpayer who has been out of the service for one year or more. In the case of an officer, the initial period of service will be limited to the first two years following his entry into the service under one of the above-mentioned occurrences.

SEC. 3. BACKGROUND.

Section 513 of the Soldiers' and Sailors' Civil Relief Act of 1940, 50 U.S.C.App. 573, incorporated into the Selective Service Act of 1948 and continued in effect by the Universal Military Training and Service Act of 1951, 50 U.S.C.App. 451, provides that the collection of any income tax from persons serving in the military services of the United States may be postponed if such person's ability to pay is materially impaired by reason of such service. The deferment, if granted, is limited to the period of military service and six months following the day such military service ends. If collection is deferred, the statutory period for the assessment and collection of tax is suspended for the period of military service and nine months following the day such military service ends.

SEC. 4. POLICY.

.01 Deferments of the collection of income tax assessments, outstanding against members of the Armed Forces, will not be granted except upon the written request of the taxpayer, supported by satisfactory evidence that his ability to pay his account has been materially impaired due to his military service. In order to be granted a deferment, the taxpayer must show that he is serving an initial period of service, as defined, and that because of this service his ability to pay his Federal income tax has been materially impaired.

.02 Deferments will be limited to the taxpayer's initial period of service, as defined herein, and six months following the day such service ends. Immediately upon the final day of the sixth month following the end of the initial period of service, the deferred account will be moved into a collectible status and collection enforced in the same manner as any outstanding account. All rights and privileges consistent with the internal revenue laws and regulations will still be available to the taxpayer.

.03 Deferments will not be granted under Section 513 of the Soldiers' and Sailors' Civil Relief Act, supra, as continued in effect, except as specifically prescribed herein.

SEC. 5. COLLECTION OF INTEREST OR PENALTY ON DEFERRED MILITARY ACCOUNTS.

Section 513 of the Soldiers' and Sailors' Civil Relief Act of 1940, supra, as continued in effect, provides the following with respect to the collection of interest or penalty, `No interest on any amount of tax, collection of which is deferred for any period under this section, and no penalty for nonpayment of such account during such period, shall accrue for such period of deferment by reason of such nonpayment.'