LETTER TO JAMES M. FREY FROM CHARLES A. BRIGGS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M01152R001001230005-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: March 16, 2010
• Sequence Number: 5
• Publication Date: May 16, 1985
• Content Type: LETTER

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Central Intelligence Agency
OLL85/1280/1
16 MAY 1985
Mr. James M. Frey
Assistant Director for Legislative Reference
Office of Management and Budget
Washington, D.C. 20503
Dear Mr. Frey:
This is in response to your legislative referral
memorandum, dated April 16, 1985 asking for our views on H.R.
2019. If enacted into law, the bill would provide benefits
for government employees who are kidnapped or deprived of
their liberty as a result of hostile action directed against
the United States. According to Congresswoman Schroeder, this
bill is designed to "take up where the Hostage Relief Act left
off."
We strongly support H.R. 2019 and urge its early
adoption. In view of the fact that the "Hostage Relief Act"
(HRA) expired in 1981, this bill is long overdue. However,
one beneficial provision in the HRA does not appear in H.R.
2019 - a tax relief section. When a person covered by H.R.
2019 is released from captivity, back pay and accrued interest
are likely to be paid in a lump sum. The tax consequences of
such an event may substantially offset any benefit intended by
the bill. The HRA dealt more favorably with tax matters by
permitting the former hostage to exclude back pay from gross
income. A number of other beneficial tax provisions for
released hostages were contained in Title II of that statute,
which we have included for your information.
As far as practicable then, we should support inclusion of
a tax relief provision in H.R. 2019 similar to that contained
in Title II of the HRA.
Sincerely,
/s/Charles A. Briggs
Charles A. Briggs
Director, Office of Legislative Liaison
Enclosure
as stated
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96-449
LA %%s OF 96th COND.-2nd SESS.
Oct. 14
excluding the benefits provided by sections 104, 105, 106, 400 through
408, 501 through 512, and 514 (50 U.S
C
thr
A
h
5
.
.
.
pp.
oug
14, 515, 616, 540
Definitions
548, 561 through 572, and 574).
74).
(b) In applying such Act for pur
(I poses of this section-
) the term "person in the military service" is deemed to
include any such American hostage;
(2) the term "period of military service" is deemed
to include
the period during which such American hostage is in a captive
status; and
the Navy, the Adjutant General f of the the Army, the the Scretary
Chiief of Naval
Personnel, and the Commandant, United States
are deemed to be references to the Secretary of State. Corps,
(c) The preceding provisions of this section shall not apply 50 USC app 501 respect to any American hostage covered by such provisions of the
PP Soldiers and Sailors' Civil Relief Act of 1940 by reason of being in the
Armed Forces.
5 USCoiarr S. 106. Notwithstanding the requirements of section 101(1), for
5561 6,1 note purposes of this title, Richard Starr of Edmonds, Washington, Peace Corps volunteer, was held captive in Colombia and releas as
on or about February 10, 1980, shall be held and considered to be an
American hostage placed in a captive status on November 4, 1979.
EFFECTIVE DATE
.5 USC 5561 note SEC. 107. The preceding provisions of this title shall take effect as of
November 4, 1979.
TITLE II-TAX PROVISIONS
5 USC 5561 note. SEC. 201. COMPENSATION EXCLUDED FROM GROSS INCOME.
26 USC 1.
For purposes of the Internal Revenue Code of 1954, the gross
income of an individual who was at any time an American hostage
does not include compensation from the United States received for
any month during any part of which such individual was-
(1) in captive status, or
(2) hospitalized as a result of such individual's captive status.
5 USC 5561 note SEC. 202 INCOME TAXES OF HOSTAGES WHERE DEATH RESULTS FROM
CAPTIVE STATUS, (a) GENERAL RULE -In the case of an individual who was at any
time an American hostage and who dies as a result of
disease or physical or mental disability incurred inju
or
such individual was in captive status- aggravated while
26 use I. (1) any tax imposed by subtitle A of the Internal Revenue Code
of 1954 shall not apply with respect to-
(A) the taxable year in which falls the date of such
individual's death, or
(B) any prior taxable year ending on or after the first day
such individual was in captive status, and
(2) any tax imposed under such subtitle A for taxable years
Preceding those specified in paragraph (1) which is unpaid at the
date of such individual's death (including interest, additions to
the tax, and additional amounts)-
94 STAT. 1970
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APPIJCABILITY TO COLOMBIAN HOSTAGE
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Oct. 14 HOSTAGE RELIEF ACT OF 1980
(A) shall not be assessed,
(B) if assessed, the assessment shall be abated, and
(C) if collected, shall be credited or refunded as an overpay-
ment.
(b) DEATH MUST OCCUR WITHIN 2YEARS OF CESSATION
death the APTI d
STATUS.-This section shall not apply
ual occurs within 2 years after such individual ceases to be in captive
status. 5 USC SSfil note
SEC. 203. SPOUSE MAY FILE JOINT RETURN.
(a) GENERAL RULE.-If an individual is an American hostage who is
in caive sus, such individual's return under section 6013(a) of the Internal Revenue Code of 1954 for 24; USC 6013
any taxable year-
(1) which begins on or before the day which is 2 years after the
date on which the hostage period ends, and
(2) for which such spouse is otherwise entitled to file such a
joint return.
(b) CERTAIN RULES MADE APPLICABLE.-For purposes of subsection
(a), paragraphs (2) and (4) of section 6013(f) of such Code (relating to
joint return where individual is in missing status) shall apply as if the
election described in subsection (a) of this section were an election
described in paragraph (1) of such section 6013(f).
SEC. 204. TIME FOR PERFORMING CERTAIN ACTS POSTPONED BY REASON 5 USC 5561 note
OF CAPTIVE STATUS.
(a) GENERAL RULE.-In the case period f dany uring individual who was at any
time American hostage, nwPhiich he was outside the United States
status (and d any period during
and hospitalized as a result of captive status), and the next 180 days
thereafter, shall be disregarded tiand determining, , ndo any interest,
revenue laws, in respect of any tax liability
penalty, additional amount, or addition to the tax) of such
individual-
(1) whether any of the acts specified in paragraph (1) of section
7508(a) of the Internal Revenue Code of 1954 was performed 26 USC 7.508,
within the time prescribed therefor, and
(2) the amount of any credit or refund (including interest).
(b) APPLICATION TO SPOUSE.-The pr entitledf to section fiss hall
apply to the spouse of any
subsection (a). The preceding sentence shall not cause this section to
than 2 years
than
apply to any spouse for any taxable year nn ng more
the date on which the hostage period
(c) SECTION 7508(d) MADE APPLICABLE:-Subsection (d of section
motion
7508 of the Internal Revenue Code of 1954 shall apply subsection
(a) in the same manner as if the benefits of subsection (a) were
provided by subsection (a) of such section 7508. 5 USC 5561 note.
SEC. 205. DEFINITIONS AND SPECIAL RULES. of this title, the term
(a) AMERICAN HOSTAGE.-For purposes
"American hostage" means any individual who, while-
(1) in the civil service or the uniformed services of the United
States, or
(2) a citizen or resident alien of the United States rendering
personal service to the United States abroad similar to the
service of a civil officer or employee of the United States (as
determined by e the sstattuus during the hostage period.
is placed in in a ca cap
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P.L. 96-449 LAWS OF 96th LONG.-2nd SESS. Oct. 14
Tehran hostages.
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(b) HOSTAGE PERIOD.-For purposes of this title, the term "hostage
period" means the period beginning on November 4, 1979, and ending
on whichever of the following dates is the earlier:
(1) the date the President specifies, by. Executive order, as the
date on which all citizens and resident aliens of the United States
who were placed in a captive status due to the seizure of the
United States Embassy in Iran have been returned to the United
States or otherwise accounted for, or
(2) December 31,1981.
(C) CAPTIVE STATUS.-For purposes of this title-
(1) IN GENERAL.-The term "captive status" means a missing
status arising because of a hostile action abroad-
(A) which is directed against the United States during the
hostage period, and
(B) which is identified by the Secretary of State in the
Federal Register.
(2) MISSING STATUS DEFINED.-The term "missing status"-
(A) in the case of employees, has the meaning given it in
section 5561(5) of title 5, United States Code,
(B) in the case of members of the uniformed services, has
the meaning given it in section 551(2) of title 37, United
States Code, and
(C) in the case of other individuals, has a similar meaning
as that provided under such sections, as determined by the
Secretary of State.
For purposes of the preceding sentence, the term "employee" has
the meaning given to such term by section 5561(2) of title 5,
United States Code.
(d) HOSPITALIZED AS A RESULT OF CAPTIVE STATUS.-
(1) IN GENERAL.-For purposes of this title, an individual shall
be treated as hospitalized as a result of captive status if such
individual is hospitalized as a result of injury or disease or
physical or mental disability incurred or aggravated while such
individual was in captive status.
(2) `-YEAR LIMIT.-Hospitalization shall be taken into account
for purposes of paragraph (1) only if it is hospitalization-
(A) occurring on or before the day which is 2 years after
the date on which the individual's captive status ends (or, if
earlier, the date on which the hostage period ends), or
(B) which is part of a continuous period of hospitalization
which began on or before the day determined under subpara-
graph (A):
(e) CIVIL SERVICE; UNIFORMED SERVICEs.-For purposes of this
section, the terms "civil service" and "uniformed services" have the
meanings given to such terms by section 2101 of title 5, United States
Code.
(f) APPLICATION OF TITLE To ALL TEHRAN HOSTAGES.-In the case of
any citizen or resident alien of the United States who is determined
by the Secretary of State to have been held hostage in Tehran at any
time during November 1979, for purposes of this title-
(1) such individual shall be treated as an American hostage
whether or not such individual meets the requirements of para-
graph (1) or (2) of subsection (a), and
(2) if such individual was not in the civil service or the
uniformed services of the United States-
(A) section 201 shall be applied by substituting "earned
income (as defined in section 911(b) of the Internal Revenue
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ge
Ig
Oct. 14 HOSTAGE RELIEF ACT OF 1980 P.L. 96-449
Code of 1954) attributable to" for "compensation from the 26 USC 5111
United States received for", and
(B) the amount excluded from gross income under section lent A++rr. p 1970 201 for any month shall not exceethe exceed for monthly equivalent the
of the annual rate of basic pay payable ; [1sc :, sz note
Executive Schedule. RUSC steno
(g) APPLICATION OF TITLE TO INDIVIDUAL HELD CAPTIVE IN COLOM
BIA.-For purposes of this title, Richard Starr of Edmonds, Washing-
ton, who, as a Peace Corps volunteer, was held captive in Colombia,
shall be treated as an American hostage who was in captive status
beginning on November 4, 1979, and ending on February 10, 1980.
(h) SPECIAL RULES.-
(1) COM.-For ur of this title, t term "com-
amount received as an annuity
pens t onp shall ENSATIONnot include apnyoses
or as retirement pay.
(2) WAGE WITHHOLDING.-Any amount excluded from gross
p. is?o.
,197 et
income under section 201 shall not be treated as wages for Ante.
purposes of chapter 24 of the Internal Revenue Code of 1954. Sh USC 4(11
USC 55bl note.
SEC. 206. STUDY OF TAX TREATMENT OF HOSTAGES
(a) STUDY.-The Chief of Staff of the Joint Committee on Taxation
are taken hostage or are otherwise
Uni United States the
tens study oft he all
placed in a missing status. Report to
(b) REPORT.-The Chief of Staff of the Joint Committee on Taxation congressional
shall, before July 1, 1981, report the results of the study made committees
pursuant to subsection (a) to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of the
Senate.
TITLE III-TREATMENT OF THE HOSTAGES IN IRAN
VISITS BY THE INTERNATIONAL RED CROSS
finds that- 5 USC 5561 note.
SEC. 301. (a) The Congress
(1) the continued illegal and unjustified detention of the
American hostages by the Government of Iran has resulted in
the deterioration of relations between the United States and
Iran; and
(2) the protracted length and the conditions of their confine-
anent have reportedly endangered the physical and mental well-
being of the hostages.
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P.L. 96-449 LAWS OF 96th COND.-2nd SESS.
Oct. 14
(b) Therefore, it is the sense of the Congress that the prudent
should
Cross make a formal request of the International Committee of the
to-
(1) make regular and periodic visits to the American hostages
being held in Iran for the purpose of determining whether the
hostages are being treated in a humane and decent manner and
whether they are receiving proper medical attention;
(2) urge other countries to solicit the cooperation of the
Government of Iran in the visits to the hostages by the Interne.
tional Committee of the Red Cross; and
(8) report to the United States its findings after each such visit.
Approved October 14, 1980.
cit
LEGISLATIVE HISTORY:
HOUSE REPORTS No. 96-1349 Pt. I (Comm. on Post Office and Civil Service), No.
96-1349, Pt. 2 (Comm on Foreign Affairs, and No 96-1349, Pt. 3
(Comm. on Ways and Means).
CONGRESSIONAL RECORD, Vol. 126 (1980)
Sept. 22, considered and passed House
Sept. 30, considered and passed Senate.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vot ifi, No. 42:
Oct. 14, Presidential statement
94 STAT. 1974
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