Louisiana Register Vol. 45, No. 11 November 20, 2019
Title 61
REVENUE AND TAXATION
Part I. Taxes Collected and Administered by the
Secretary of Revenue
Chapter 49. Tax Collection
§4914. Prescription of Refunds Claimed Pursuant to the
Federal Combat-Injured Veterans Tax Fairness
Act of 2016
A. General. R.S. 47: 1623(G) provides for an extension
of the prescriptive period applicable to certain individual
income tax refunds. Taxpayers who received a federal
income tax refund pursuant to the Combat-Injured Veterans
Tax Fairness Act of 2016 are entitled to an extension of
prescription on the corresponding Louisiana income tax
refund. The extension of prescription only applies to refunds
allowed pursuant to the Combat-Injured Veterans Tax
Fairness Act of 2016.
B. Combat-Injured Veterans Tax Fairness Act of 2016.
On December 16, 2016, the President signed the Combat-
Injured Veterans Tax Fairness Act of 2016 into law as Public
Law 114-292. Public Law 114-292 provides an extension of
the federal statute of limitations for refunds of income tax
erroneously paid on lump-sum disability severance
payments made by the U.S. Department of Defense. For tax
years 1991 through 2016, the Department of Defense
erroneously withheld income tax from lump-sum disability
severance payments that are exempt from federal income tax
pursuant to Section 104(a)(4) of the Internal Revenue Code.
1. Erroneous Withholding. Federal income tax was
erroneously withheld from the following Department of
Defense payments:
a. lump-sum disability severance payments for
combat-related injuries; and
b. lump-sum disability severance payments that
would qualify as disability compensation from the
Department of Veterans Affairs.
2. Required Notice. Public Law 114-292 requires the
Department of Defense to provide notice to affected
taxpayers whose exempt payments were subjected to
erroneous withholding.
3. Federal Extension. Public Law 114-292 provides an
extension of the three-year period for claiming a tax refund
pursuant to Section 6511(a) of the Internal Revenue Code.
The extension is one year after the date the required notice is
provided to the taxpayer.
4. Amended Return or Standard Refund Amount
a. Pursuant to IR-2018-148, the Internal Revenue
Service allows affected taxpayers, including the surviving
relative of a deceased taxpayer, the option of either:
i. filing an amended federal income tax return for
the tax period in which the lump-sum disability severance
payments were received to remove the exempt income from
gross income; or
ii. claiming a standard refund amount.
b. The standard refund amounts are as follows:
i. $1,750 for tax years 1991 through 2005;
ii. $2,400 for tax years 2006 through 2010;
iii. $3,200 for tax years 2011 through 2016.
C. Louisiana conformity with federal adjusted gross
income. Pursuant to R.S. 47:293(1), Louisiana adjusted
gross income means the adjusted gross income that is
reportable on the federal income tax return. Thus, lump-sum
disability severance payments that are exempt from federal
income tax pursuant to Section 104(a)(4) of the Internal
Revenue Code are likewise exempt from Louisiana income
tax. Because Louisiana conforms to federal adjusted gross
income, exempt lump-sum disability severance payments
that were included in a taxpayer’s federal adjusted gross
income were by default also included in Louisiana adjusted
gross income.
D. Prescription of Refunds. Act 367 of the 2019 Regular
Session of the Louisiana Legislature enacted R.S. 47:
1623(G), which provides for an extension of the prescriptive
period applicable to certain refunds of Louisiana individual
income tax. If a taxpayer receives a federal individual
income tax refund pursuant to the Combat-Injured Veterans
Tax Fairness Act of 2016, prescription is extended for the
corresponding Louisiana income tax refund.
1. Length of Extension. The prescriptive period does
not expire until after two years from the date of the
taxpayer’s receipt of the U.S. Department of Defense notice
issued pursuant to the Combat-Injured Veterans Tax Fairness
Act of 2016. The U.S. Department of Defense notice is
deemed to be received on the last day of the month that is
printed on the notice. For example, if the date of the U.S.
Department of Defense notice is July 20, 2018, then the
taxpayer has until July 31, 2020 to request a refund.
Taxpayers that did not receive a U.S. Department of Defense
notice but received a federal refund pursuant to the Combat-
Injured Veterans Tax Fairness Act of 2016 have until July 31,
2020 to request a Louisiana refund.
2. Amended Return or Standard Refund Amount
a. Pursuant to R.S. 47: 1623(G), eligible taxpayers
have the option of either:
i. filing an amended Louisiana individual income
tax return (Form IT-540) for the tax period in which the
lump-sum disability severance payments were received to
remove the exempt income from adjusted gross income, or
ii. claiming a standard refund amount by
submitting a completed Form R-6185, Individual Income
Tax Refund Claim Pursuant to the Federal Combat-Injured
Veterans Tax Fairness Act of 2016. However, taxpayers are
required to make the same election as was made for federal
purposes except as provided in paragraph E. For example, if
a taxpayer elected to claim the standard refund amount for
federal purposes, the taxpayer is required to claim the
standard refund amount for Louisiana purposes.
b. The Louisiana standard refund amounts are as
follows:
i. $326 for tax years 1991 through 2002;
ii. $592 for tax years 2003 through 2008;
iii. $543 for tax years 2009 through 2010;
iv. $637 for tax years 2011 through 2016.
3. Interest. The general provision on interest on
refunds provided by R.S. 1624(A)(1) shall apply to refunds
issues pursuant to R.S. 47: 1623(G). Pursuant to R.S.
1624(A)(1), interest is allowed on refunds from ninety days
after the later of the due date of the return, the filing date of
the return or claim for refund on which the overpayment is
claimed, or the date the tax was paid.
E. Documentation Required. Taxpayers must attach a
copy of the federal form 1040X and a copy of the
Department of Defense notice (Letters 6060-A and 6060-D)
or other documentation required by the IRS for taxpayers
