Washington, DC (by Andrew Tilghman/Military Times) -- About 30,000 active-duty troops and a similar number of reserve-component members owe the Internal Revenue Service a collective $390 million in back taxes, according to IRS data.
Beyond the normal errors that many filers make, experts say service members face unique challenges in sorting out their taxes.
"Military tax returns are a little more complicated," said Theresa Buchholz, a lead tax research analyst with H&R Block Tax Services in Kansas City, Mo.
One common issue is the combat tax exclusion, which allows troops to avoid paying income tax for any month in which they serve in designated combat zones.
"It can be confusing because it's hard to know what to include and what not to include" under that exclusion policy, Buchholz said.
Another factor is frequent changes of address as troops deploy and move to new assignments over their careers. Tax documents mailed to the wrong address can lead service members to mistakenly file incomplete returns -- a red flag for the IRS.
And if the IRS finds a problem with a return, some troops who have recently moved might miss the notification letter warning them about possible delinquency. Taxpayers who fail to respond to IRS delinquency notifications can miss an opportunity to straighten out the problem before it becomes bureaucratically set in stone.
Michael Sullivan, an owner of Fresh Start tax services in Florida, said he routinely gets Skype calls and emails from troops with unexpected tax problems.
"A lot of times that notice does not catch up to where they are actually living and the IRS is only obligated to send the notice to the most recent address" on file, Sullivan said. "If the IRS can't contact you, you're going to get an enforcement action."
The IRS is also required to notify military financial service offices when a service member is found to be delinquent. The military pay offices will seek an immediate halt to enforcement actions if that service member is deployed or hospitalized due to a combat injury.
Military finance offices also try to contact the troops cited and advise them on how to proceed. Many accountants recommend getting professional assistance when dealing with the IRS.
For troops found delinquent, the IRS will likely enforce a levy on paychecks until full payment is received, the same as for civilians and private-sector workers who run afoul of the IRS.
The IRS delinquency rate for service members, both active and reserve, is about 2 percent, slightly lower than the rate for federal civilian employees, which averages nearly 3 percent.
The delinquency rate for military retirees is higher. Nearly 4 percent owe a total of $1.5 billion in back taxes, IRS data show.