LETTER TO THE HONORABLE RUSSELL D. LONG FROM EDWIN S. COHEN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000400180003-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 21, 2016
• Document Release Date: June 9, 2008
• Sequence Number: 3
• Publication Date: January 17, 1972
• Content Type: LETTER

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THE DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220
TREA has not reviewed. Processed IAW
CIA TREA arrangement letter dtd 4/11/08.
This is 'in response to your request for the views and recom-
mend.ations of the Treasury Department with respect to S. 2977+,
entitled "A Bill 'To amend section 112 of the Internal Revenue Code
of 1954 to exclude from gross income the entire amount of the com-
pensation of r.,,.nlbe - of the Armed Forces of the United States and
of civilian E :: (.] oy`Gas who are prisoners of wax, tni6sing in action,
or in, a detained status during the Vietnam conflict."
Section 11.2 o'' the Internal Revenue Code of l951 provides for
the exemption i4'crn ta:?:ation of all compensation received for active
service, as a co:rili ssioned warrant officer, warrant officer, or
enlis-'.ed member, aria up to $500 of co:apensaL-ion received as a
cormiissioned officer, for any month during any part of which such
member served in a combat zone. Vietnam, the only present combat
zone, was designated. as such by Executive' Order .11216 on January 1, 1967+.
The effects of the proposed legislation on existing law are
twofold. First, t'ie proposed bill would remove the $500 per month
limitation with respect to commissioned officers who are, during
any month, in a missing status (as defined in T?,,le 37, U.S.C.
?551(2)) during the Vietnam conflict. Second, the proposed bill
would extend a new exclusion to civilian employees of any branch of
the executive department who are, during any mon'.h, in a missing
status during the Vietnam conflict. For purposes of this latter
provision, the terms "employee" and `!missing sta,;us" have the respec-
tive meanings given to such terms by Title 5, U.S.C. ?5561(2) and (5).
The new exclusions ander the proposed bill would apply, for officers,
warrant officers, enlisted men and civilian employees, without regard
to whether the individual served in a combat zone. The amendment
would be effective with respect to taxable years ending on and after
February 28, 1961.
The Treasury Department does not normally support legislation
favoring taxpayers in a special class. Generally. speaking the tax
laws are an inappropriate vehicle for accomplishing such specific
goals. The Department is, however, in total sympathy with the view
that deep-felt national concern should be expressed for the well-
being of imprisoned or missing servicemen and ci"%ilians serving in
the Vietnam conflict. Accordingly, we believe that the extension
of section 112 is justified under the extraordinary circumstances
involved here, although this action should not he considered as a
precedent for extending the provisions of section 112 in future cases.
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While the Treasury Department will not object to the passage of
a bi1.1 which extends the benefits of section 112 to members of the
Armed Forces and. civilian e::ployces who are prisoners of war or in a
missing status because of their active service with respect to the
Vietno" conflict, the Department is seriously concerned that the
language of the proposed bill will carry its benefits further than
this intended objective. In addition, the Department feels that there
are a number of technical difficulties involved in the language of
the bill as proposed.
The initial bills (H.R. 517, H.R. 6833, S. 21'68) proposing amend-
ments to section 112 would have covered only members of the Armed Forces.
However, it was pointed out by the Department of he Navy that there
are civilian employees of the Navy Department who are in precisely the
same position as members of the Armed Forces who vre prisoners of war
or in a missing status. It was felt by the Department of Defense and
agreed to by the Treasury I)epart.ment that there is no reason for not
extending the same benefits to civilian employees as those extended to
members of the Armed Forces, as long as both are in precisely the same
position. At the time this my>tter was discussed, there were only two
civilian employees in this position, an employee relations specialist
who had been in charge of the Vietnamese employee relations program for
employees involved in construction and support, and a fire protection
specialist. To the extent of presently available information, these
are the only two civilian employees who have become prisoners of war
or axe in a missing status due to the Vietnam conflict. -
Under the language of S. 2914k, the exclusion from gross income
would be extended-to all civilian employees of any executive depart-
ment, regardless of where their missing status might occur. Thus,
for example, an FBI agent who disappeared while investigating a case
in Harlem would be covered by the language of the proposed bill.
Likewise, a CIA agent who disappeared in Berlin while in active
service would also be covered.
The bill would have these results because of the definitions of
the terms "employee" and "missing status" contained in 5 U.S.C. ?5561.
An "employee" is defined by 5 U.S.C. ?5561(2) as any employee in or
under an executive agency or a military department. The definition
of "missing status" contained in 5 U.S.C. ?5561(5) includes the simple
status of "missing", as well as '!missing in action, interned in a
foreign country, captured, beleaguered, or beseiged by "a hostile
force, or detained in a foreign country against his will."
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-3-
In shcort, under the statutory definition, any civilian employee
of ~,.n executive c ,r
i.litar;,r depr,.rtr,:ent who disanpcar. s while in active
sC i-vi e for f hs;V ci ep_;rt~~ent, and is classified by that department as
in an offica u.l '4i