|Soldiers & Sailors Civil Relief Act (SSCRA)|
|Chapter 6, Taxation|
Purpose and Scope
Congress intended that service personnel be given relief from strict compliance with the rules for the payment of taxes to various tax authorities. Public policy dictates that the service member should be spared the loss of his/her home, the burden of penalties for nonpayment of income taxes, and the requirement to pay a myriad of taxes to jurisdictions where he/she is situated solely because of his/her military service. In this chapter, the provisions of sections 500, 513, and 514 of the Act [50 U.S.C. App. §§ 560, 573, and 574) will be discussed.
Taxes Respecting Personalty, Money, Credits, or Realty; Sale of Property to Enforce Collection; Redemption of Property Sold; Penalty for Nonpayment; Notice of Rights to Beneficiaries of Section
(50 U.S.C. App. § 560)
General. Section 500 involves the sale of property resulting from tax deficiencies as well as subsequent redemption rights. Taxes include any taxes or assessment, whether special or general, due before or during the period of military service. It does not include income taxes.
Property protected. The Act specifically protects certain classes of property:
Realty. Protection of realty under this section has been the subject of court interpretation. Courts have strictly construed the limitation on the use of the property by the service member. Where the service member never resided on the land, farmed it, raised livestock on it, or leased it to another for agricultural purposes, but merely inspected it periodically for trespassers, a court held that the service member was not in "occupation of the land for agricultural purposes" and, therefore, not protected against the sale for nonpayment of taxes.
Sale of property. Sale of the property described above may not be accomplished to enforce the collection of taxes or assessments except with permission of the court and then only when the court determines that the military service does not materially affect the service member's ability to pay. One court held that a deed issued in violation of section 500(2) was voidable. Another court held that a grantee under such a void tax deed had no cause of action against a service member for improvements the grantee placed on the land in reliance on the deed. The grantee had been notified that a person protected by the Act owned the property.
Right of redemption. In cases where the property may be lawfully sold to satisfy taxes or assessments, section 500(3) gives the service member a liberal period of time in which to redeem the property. Whenever protected property is sold or forfeited for the collection of taxes or assessments on the property, the service member is granted the right to redeem or commence action to redeem the property. Action must begin not later than six months after termination of military service or a later date, if a greater period for redemption is authorized by the laws of the state or territory. The ability to pay need not be materially affected by military service for section 500(3) to apply. Rights under section 500(3) are absolute rights and are not subject to judicial discretion.
If relief under section 500 is inappropriate, either because more than 6 months have passed since termination of service, or because the land is not one of the limited types listed in section 500, section 205 should be examined for possible relief. Section 205 suspends the time for computing the limitation of actions during the period of service. This includes the period "for the redemption of real property sold or forfeited to enforce any obligation, tax, or assessment." Using section 205 in conjunction with section 500, greater relief may be obtained. In Le Maistre v. Leffers, the Supreme Court held that section 205 is not restricted by section 500; rather, they supplement each other.
Above Information Courtesy of United States Army JAG Corps