Fr:      Chief Tim Wall, Chair

To:     All VCOS Section Members

Date: August 16, 2006

Re:     Information Requested on IRS taxing of local volunteer incentives

The IAFC and the VCOS section have been working with Representative John Larson (D-CT), who introduced the Volunteer Responder Incentive Protection Act of 2005. Rep. Larson introduced this bill because many towns in Connecticut offer property tax abatement to volunteer firefighters and emergency medical personnel to assist departments with recruitment and retention.

In 2002, the IRS began to count this property tax abatement as taxable income.

The Volunteer Responder Incentive Protection Act of 2005 will amend the Internal Revenue Code to exclude from income and employment taxes any property tax rebates or other benefits provided to volunteer firefighters and emergency medical responders.  We believe that taxing such incentives makes them ineffective, and may hinder recruitment and retention of volunteer emergency responders.

The IAFC is working to ascertain whether volunteer incentives are being adversely affected by IRS rulings in other states.   If your department has been affected by IRS rulings on the tax status of incentives, please contact Lucian Deaton, IAFC Government Affairs Manager:   LDeaton@iafc.org.

 The Government Relations Department will be analyzing data from all respondents and will report back to us with their findings.