College of Law’s Tax Clinic Secures $18k Refund for Veteran

Last fall, Peter Denton received an email from the Department of Veterans Affairs with a memo outlining that severance payments he received from the Department of Defense were improperly taxed, and that he may be eligible for a return. This notice resulted from the Combat-Injured Veterans Tax Fairness Act of 2016, which seeks to ameliorate veteran severance payments paid after Jan. 17, 1991, that were inappropriately treated for tax purposes.

Denton served a full career in the Army—the first half as a combat engineer, and the second as a nuclear biochemical defense noncommissioned officer—until he left in 2012. He currently studies sustainable energy management at SUNY College of Environmental Science and Forestry (SUNY ESF) and works part-time in SUNY ESF’s police dispatch.

“When I went online to fill out the forms, there were two options,” says Denton. “The easier one would have authorized a $3,200 refund, or I could fill out additional paperwork for a full refund.” Knowing a full refund would likely mean more than $3,200, Denton sought help with the tax forms. Denton initially reached out to Clear Path for Veterans, who guided him to the College of Law’s Low Income Taxpayer Clinic (LITC).

In the clinic, student attorney 3L Robert Kawecki helped Denton prepare and submit an amended return to the IRS.

“It was a fairly simple and standard tax issue,” says Kawecki. “We met with Mr. Denton to review his paperwork, go over the figures and send his return.”

Both were pleased to learn that the IRS accepted the return, and about two months later, Denton received an $18,000 refund.

“That is easily half the time it takes the IRS to process normal amended returns,” says LITC Director Robert Nassau, “which, I think speaks to the IRS’s commitment to get our vets their rightful cash ASAP.”

“It’s a really great to be able to see even a simple case from start to finish,” says Kawecki. “Being able to work one-on-one with a client through the clinic really puts a human touch on the law and it’s rewarding to directly see the impact of its success.”

Denton says he was amazed and glad he sought the extra work for a full refund. “I’m really thankful for what the clinic did for me,” he says. “Any vet that can use the tax clinic’s service should do so. They were great to work with.”

The Combat-Injured Veterans Tax Fairness Act required the Department of Defense to identify and notify veterans whose severance payments may have been improperly taxed. The Department of Defense and IRS sent letters to approximately 130,000 separated military members in July of 2018. The act provides an extension of the limitation on time to file for a refund and gives eligible veterans a year from their notice to file.

A number of individuals affected by the act may not have current mailing addresses or contact information to receive notice. Veterans who did not receive contact from the Department of Defense who believe they are eligible may still file a claim. If you are or know a veteran who might be affected, you can visit the IRS’s Information Available on the Combat-Injured Veterans Tax Fairness Act for guidance and instruction.