News

The National Volunteer Fire Council (NVFC) has obtained a copy of a letter from the Internal Revenue Service to a member of Congress, whose name was withheld, that seems to indicate that length of service award program (LOSAP) payments are not considered “qualified benefits” under the Volunteer Responder Incentive Protection Act (VRIPA). VRIPA was enacted in 2007 and prohibits the federal government from taxing certain benefits provided to volunteer emergency responders by state or local units of government, including any tax benefits and up to $360 per year of any non-tax benefit. LOSAPs are pension-like programs for volunteer emergency responders.

 

The IRS letter states: “Payments received from a retirement program are for services performed in prior years. These payments are neither reductions or rebates of state and local taxes, nor amounts received for emergency response services performed during the year. Therefore, amounts received from a retirement program do not qualify for the exclusion from income under section 139B.”

 

Read the full letter.

 

The NVFC believes that the intent of Congress when enacting the law was that LOSAP payments should qualify under VRIPA. The NVFC, along with staff from Congressman John Larson’s (D-CT) office and representatives of other national interest groups, is meeting with a representative of the IRS later this month to request reconsideration of the eligibility of LOSAP under VRIPA. Larson was the original sponsor of VRIPA and was awarded the NVFC Legislator of the Year award in 2008.

 

VRIPA expires at the end of 2011 and the NVFC has begun working with our allies in Congress to develop legislation extending the benefit. Depending on the outcome of the August meeting with the IRS, the NVFC may pursue a legislative fix to ensure that LOSAP is covered under VRIPA.