Federal and territorial returns do not violate the SCRA single-jurisdiction rule

Plain-English summary

Chief Counsel considered whether requiring a servicemember to file both a federal return and a Puerto Rico return would conflict with the Servicemembers Civil Relief Act. The email concluded that the federal government is not a “tax jurisdiction” under the SCRA definition. Section 571(g)(3) defines that term as a state or its political subdivision, while the SCRA definition of state includes the District of Columbia and the territories. The SCRA's single-jurisdiction filing rule therefore limits servicemembers to one state or territorial jurisdiction, without eliminating a separate federal filing obligation. The email added that treating the United States as a tax jurisdiction would also call ordinary federal and state filing requirements into question.

Ruling snapshot

• Question: Does requiring both a federal return and a Puerto Rico return violate the SCRA rule limiting servicemembers to one tax jurisdiction?
• Outcome: advice given
• Key authorities: Servicemembers Civil Relief Act § 571(g)(3)

Full text (IRS public release)

ID:         CCA_2023121011485548                                  [Third Party Communication:

UILC:       931.00-00                                             Date of Communication: Month DD, YYYY]

Number: 202352019
Release Date: 12/29/2023
From: --------------------
Sent: Tuesday, November 14, 2023 3:29:28 PM
To: ------------------------------------------------------------
Cc: --------------------
Bcc:
Subject: RE: U. S. Military Prep Follow Up


Regarding Dee’s first point, I don’t believe that the federal government is a “tax
jurisdiction” under the SCRA, so a dual filing obligation in this sense (federal return plus
PR return) would not contradict the SCRA. Section 571(g)(3) of the SCRA defines tax
jurisdiction as a State or political subdivision thereof. Under the SCRA, the term “State”
includes D.C. and the territories. Therefore, when the SCRA says that servicemembers
are only required to file in one tax jurisdiction, it means they only have to file in one
state/territory. Alternatively, if the U.S. were considered a tax jurisdiction for SCRA
purposes, making service members file both federal and state tax returns would also be
a dual filing requirement in violation of the SCRA.