Congressional Record: February 28, 2005 (Senate) Page S1796-S1810 STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. ROCKEFELLER (for himself, Mr. Lott, Mr. Roberts, Ms. Snowe, Mr. Bayh, Mr. Chambliss, Ms. Mikulski, Mr. Corzine, Mr. Levin, Mr. DeWine, Mr. Wyden, Mr. Bond, Mrs. Feinstein, Mr. Hagel, and Mr. Hatch): S. 469. A bill to amend the Internal Revenue Code of 1986 to exclude from gross income the gain from the sale of a principal residence by certain employees of the intelligence community; to the Committee on Finance. Mr. ROCKEFELLER. Mr. President, today I am introducing legislation to extend an important tax benefit to the men and women of the United States Intelligence Community. I am pleased that in keeping with the bipartisan traditions of the Intelligence Committee, every member, Republican and Democrat, is listed as an original cosponsor. Two years ago, on Veterans Day, President Bush signed into law an important modification to our tax code to ensure that it does not punish those who serve our country in the military and in the U.S. foreign service. Unfortunately, that legislation did not extend to intelligence officers, who serve alongside their military and diplomatic colleagues all around the world and who often face the same tax issues encountered by those individuals. The legislation I am introducing today makes a common sense modification to the capital gains tax exclusion rules to ensure that when selling their homes, intelligence officers do not pay more tax than they would if they did not serve their country. The men and women of the Intelligence Community, serve with the military in Iraq, Afghanistan, Korea, and numerous other locations where we have U.S. forces deployed. They also serve in U.S. Embassies around the world. Often times they carry an added burden because they must serve undercover. Their families and friends don't know what they do. They live their cover story by day and perform their critical intelligence work by night. They work for all fifteen of the agencies included in the intelligence community and they do a remarkable job. These people are dedicated to their mission and to this country. These patriotic individuals sacrifice a great deal on behalf of the rest of us. They uproot and relocate their families every few years. They often live in places most of us wouldn't even visit. And they rarely have the quality of life with access to modern luxuries that the rest of us take for granted. To then say that they are going to be penalized by our tax code is unacceptable. Since 1997, our tax code has allowed Americans to sell their homes without paying taxes on up to $250,000 of capital gains. Married couples can exclude $500,000 in capital gains from taxation. This provision is specifically intended only for principle residences, and therefore, sellers are required to have lived in the homes for at least 2 of the 5 years prior to sale. In 2003, Congress recognized that this residency requirement was often difficult for members of the armed forces and foreign service to satisfy. If they had been stationed away from home while serving their country, they were essentially punished with higher taxes on the sales of their homes. Congress addressed this injustice by allowing service personnel and foreign service officers who were stationed away from home to suspend the residency requirement for as many as ten years. This change allows, for example, a soldier who spent the last 7 years stationed in Germany to exclude from taxes the capital gains on the sale of his former home in the U.S., as long as he had lived in it for at least 2 of the 5 years prior to his service overseas. The change is effective on all sales after 1997, when the capital gains tax exclusion for home sales was provided to all Americans. Fairness demands that Congress apply the same rules to intelligence officers serving their country away from home. My legislation simply inserts intelligence officers into the list of those allowed to suspend the 5 year residency test period for up to 10 years while they are stationed away from home. I intend to work with my colleagues on the Intelligence Committee and the Finance Committee to ensure that this provision is enacted this year. ______
S 469 IS
109th CONGRESS 1st Session S. 469 To amend the Internal Revenue Code of 1986 to exclude from gross income the gain from the sale of a principal residence by certain employees of the intelligence community. IN THE SENATE OF THE UNITED STATES
February 28, 2005
Mr. ROCKEFELLER (for himself, Mr. LOTT, Mr. ROBERTS, Ms. SNOWE, Mr. BAYH, Mr. CHAMBLISS, Ms. MIKULSKI, Mr. CORZINE, Mr. LEVIN, Mr. DEWINE, Mr. WYDEN, Mr. BOND, Mrs. FEINSTEIN, Mr. HAGEL, and Mr. HATCH) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL To amend the Internal Revenue Code of 1986 to exclude from gross income the gain from the sale of a principal residence by certain employees of the intelligence community.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL RESIDENCE BY CERTAIN EMPLOYEES OF THE INTELLIGENCE COMMUNITY.
(a) In General- Subparagraph (A) of section 121(d)(9) of the Internal Revenue Code (relating to exclusion of gain from sale of principal residence) is amended by striking `duty' and all that follows and inserting `duty--
`(i) as a member of the uniformed services,
`(ii) as a member of the Foreign Service of the United States, or
`(iii) as an employee of the intelligence community.'.
(b) Employee of Intelligence Community Defined- Subparagraph (C) of section 121(d)(9) of the Internal Revenue Code of 1986 is amended by redesignating clause (iv) as clause (v) and by inserting after clause (iii) the following new clause:
`(iv) EMPLOYEE OF INTELLIGENCE COMMUNITY- The term `employee of the intelligence community' means an employee (as defined by section 2105 of title 5, United States Code) of--
`(I) the Office of the Director of National Intelligence,
`(II) the Central Intelligence Agency,
`(III) the National Security Agency,
`(IV) the Defense Intelligence Agency,
`(V) the National Geospatial-Intelligence Agency,
`(VI) the National Reconnaissance Office,
`(VII) any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs,
`(VIII) any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard,
`(IX) the Bureau of Intelligence and Research of the Department of State, or
`(X) any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information.'.
(c) Special Rule- Subparagraph (C) of section 121(d)(9) of the Internal Revenue Code of 1986, as amended by subsection (b), is amended by adding at the end the following new clause:
`(vi) SPECIAL RULE RELATING TO INTELLIGENCE COMMUNITY- An employee of the intelligence community shall not be treated as serving on qualified extended duty unless--
`(I) for purposes of such duty such employee has moved from 1 duty station to another, and
`(II) at least 1 of such duty stations is located outside of the Washington, District of Columbia, and Baltimore metropolitan statistical areas (as defined by the Secretary of Commerce).'.
(d) Conforming Amendment- The heading for section 121(d)(9) of the Internal Revenue Code of 1986 is amended to read as follows: `Uniformed services, foreign service, and intelligence community'.
(e) Effective Date; Special Rule-
(1) EFFECTIVE DATE- The amendments made by this section shall take effect as if included in the amendments made by section 312 of the Taxpayer Relief Act of 1997.
(2) WAIVER OF LIMITATIONS- If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.