FOR IMMEDIATE RELEASE: February 13, 2003
CONGRESSIONAL
DELEGATION URGES BUSH TO END TAXATION OF VOLUNTEER EMERGENCY RESPONDER
INCENTIVES
WASHINGTON, D.C.- The Connecticut
Congressional Delegation today urged President Bush to order an
administrative stay on an Internal Revenue Service (IRS) order requiring
that tax abatements and other benefits allowed to local volunteer
emergency responders be counted as federally taxable income. Connecticut
and other states have passed laws allowing municipalities to offer such
benefits to volunteer firefighters and emergency medical responders and
taxation of these benefits may hurt the recruitment and retention of
volunteers. The text of the letter is below.
February 11, 2003
President George W. Bush
The White House
1600 Pennsylvania Avenue
Washington, DC 20501
Dear President Bush:
We are writing you today to
respectfully urge you to order an administrative stay of Internal Revenue
Service ruling #200227003 regarding tax abatement programs. This ruling
could have a serious impact on legislation recently enacted in Connecticut
and several other states allowing localities to provide property tax
abatements and other benefits to volunteer firefighters and emergency
medical responders.
Studies conducted by the United
States Fire Administration show that 73 percent of all fire departments in
the United States are volunteer departments. These volunteer departments
account for protecting 38 percent of America's population, in both rural
and urban areas. However, statistics have shown that the ranks of
volunteer fire companies are shrinking at an alarming rate. The number of
volunteer firefighters around the country has declined 5 to 10 percent
since the 1980s, while emergency service calls have steadily increased
over the same period.
To help localities recruit and
retain volunteer firefighters, the State of Connecticut enacted a law
allowing among other things, the legislative body of any municipality to
establish, by ordinance, a program to abate property taxes due for any
fiscal year for a resident of the municipality who volunteers his or her
services as a firefighter, emergency medical technician, or ambulance
driver in the municipality. Many other states have passed similar
initiatives.
However, cities and towns seeking
to pass local ordinances providing the abatements or other incentives
under the state law are concerned about IRS ruling #200227003's potential
impact on their initiatives. Many are concerned that this ruling could
require volunteer firefighters and volunteer emergency medical responders
to include these abatements as federally taxable income and could impose
substantial paperwork and fiscal requirements (such as FICA payments) on
the participating local governments. In short, this confusing ruling
undermines the intention of providing incentives to recruit and retain
enough volunteer firefighters and emergency medical responders to keep our
communities safe and puts an enormous economic and burden on localities.
In fact, some towns have been forced to repeal their programs altogether
because it was simply impossible to reconcile the program within existing
federal tax law.
You personally have called for
more Americans to volunteer their time in service to their neighbors and
the country, and in today's fast paced economy where men and women must
work longer hours or multiple jobs just to break even, time to volunteer
is becoming a thing of the past. These types of creative incentives help
encourage new volunteers to strengthen the ranks of the men and women who
already safeguard our community, and provide important retention
incentives. If our cities and towns are willing to forgo their local tax
revenues in order to ensure they have enough volunteer firefighters and
emergency medical responders to protect their communities, then Washington
DC and the IRS should not be allowed to instead claim the money for
themselves.
Again, we would urge you to order
an administrative stay of IRS ruling #200227003 regarding tax abatement
programs, and would look forward to working with you to enact the
legislation we are proposing that would clarify the exemption of property
tax abatements and other benefits provided to volunteer firefighters and
emergency medical responders from income and wage withholdings. Thank you
in advance for your attention to this matter.
Sincerely,
S/ CHRISTOPHER J. DODD
United States Senator
S/ JOSEPH I. LIEBERMAN
United States Senator
S/ NANCY JOHNSON
Member of Congress
S/ CHRISTOPHER SHAYS
Member of Congress
S/ ROSA DELAURO
Member of Congress
S/ JOHN LARSON
Member of Congress
S/ ROB SIMMONS
Member of Congress
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