Measure Would Prevent the IRS from Taxing Compensation for Service

WASHINGTON – Senators Chris Dodd (D-CT) and Gordon Smith (R-OR) today introduced bipartisan legislation to prevent the Internal Revenue Service (IRS) from taxing the compensation awarded to local volunteer firefighters and emergency medical responders for service to their communities. Congressman John Larson (D-CT) introduced similar legislation in the House of Representatives.

“I have long believed that our country should do more to encourage Americans to volunteer in their communities,” said Senator Dodd. “A modest tax break is not a large repayment for the great services that volunteer firefighters and emergency first responders provide to our communities. We’ve seen their bravery firsthand recently on the frontlines of disasters such as Hurricane Katrina and Rita. The least we can do is allow communities to offer modest incentives to recruit and retain volunteers.”

“The safety of many small towns depends on volunteers,” Smith said. “They’re on the front lines whether it’s a house fire or a natural disaster. They do their jobs because they care about their neighbors and their communities, but if we can make it a little easier for them, we should.”

Many cities across the country, including those in Connecticut and Oregon, offer incentives like property tax abatements to volunteer firefighters, search-and-rescue teams, emergency medical technicians, paramedics and ambulance drivers. These incentives help local fire departments and emergency first responder services recruit and retain volunteers. In 2002, the IRS ruled that property tax abatements to volunteers should be treated as taxable income, significantly diminishing financial incentives to serve.

Seventy-five percent of firefighters and emergency first responders in our country today are volunteers. Despite an increase in the number of emergency calls made to volunteer fire and emergency services, the number of volunteer firefighters and emergency first responders has declined in past years – anywhere between five and ten percent since 1983.