On March 17th, U.S. Senators John Boozman (R-AR) and Mark Warner (D-VA) introduced bipartisan legislation, the Combat-Injured Veterans Tax Fairness Act of 2016, to address the Government's practice of wrongfully withholding taxes from disability severance pay to veterans with combat-related disabilities.

Under federal law, veterans who suffer combat-related injuries and who are separated from the military are not supposed to be taxed on the one-time lump sum disability severance payment they receive from the DOD. However, NVLSP discovered that the DOD has wrongfully withheld taxes from approximately 14,000 veterans since 1991.

"Most troubling is that we learned the government had known about this problem for decades yet continued to take this money from thousands of disabled veterans. After exploring all legal options, we concluded that the only large-scale fix to this problem was through legislation, and we are so grateful that Senator Boozman and Senator Warner are sponsoring this bill. The sad truth is that the government essentially stole $78 million dollars from disabled combat veterans because of an accounting problem it's known about for years. To help undo the harm caused by this egregious oversight, we hope this legislation is passed quickly," Tom Moore, attorney and manager of the Lawyers Serving Warriors project at NVLSP, said.

SPC C enlisted in the Army in 2000, and served two tours of duty in support of Operation Iraqi Freedom. During his service, he experienced several stressful and disturbing events including exposure to small arms fire, close proximity to an improvised explosive device, and the loss of several of his fellow soldiers. In 2006, SPC C underwent a health assessment where he reported mental health issues including nightmares, feeling numb and detached from others, difficulty sleeping, irritability and being easily startled. SPC C was diagnosed with chronic post-traumatic stress disorder, obsessive compulsive disorder, depression, and insomnia related to a mental disorder. An evaluation by the Army Medical Evaluation Board concluded that he was medically unfit for duty, and he was assigned a 10% disability rating by the Physical Evaluation Board, and in 2007 was discharged with only a one-time severance payment, no retirement benefits, and no access to military health care.

In 2013 SPC C approached NVLSP's Lawyers Serving WarriorsŪ program for help. To be able to receive retirement benefits, he needed to file an application to the Physical Disability Board of Review (PDBR) for an increase in his military disability rating. Because the PDBR does not allow for appeals of its denials, the only way to appeal a PDBR denial is to file a complaint at the U.S. Court of Federal Claims. However, complaints to the Court must be filed within six years of discharge - a deadline that was quickly approaching for SPC C. If the PBDR had failed to increase his disability rating, SPC C would lose the opportunity to appeal the decision in court. To preserve SPC C's ability to appeal a possible PDBR denial, NVLSP, working with attorneys at Paul Hastings, filed a complaint at the Court of Federal Claims on SPC C's behalf and then stayed the proceedings in order to file his PDBR application.

The PDBR recommended that SPC C be granted permanent disability retirement, but the Secretary of the Army rejected this recommendation. NVLSP and Paul Hastings then amended the complaint at the Court by adding that the Secretary's decision to deny SPC C's permanent disability retirement was arbitrary and capricious. In October 2015, the judge ruled in favor of SPC C and ordered the Army to correct SPC C's records to reflect that he was permanently retired with a 50% disability rating, which entitles him to monthly disability payments, lifetime access to military heath care, and a military ID card that grants him lifetime commissary and military post exchange privileges.

Ms. Valdellon is also contacting Vietnam veterans identified by NVLSP as possibly having been wrongfully denied VA benefits for diseases related to Agent Orange exposure, based on erroneous findings that they did not serve on the land mass or inland waterways of Vietnam.