Semiannual Guide to Expert Witnesses - SPECIAL ISSUE - AGUIDE FOR TOHELP VETERANS AND MEMBERS OF THE ARMED FORCES
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Semiannual Guide to Expert Witnesses
November 2012 /$4
SPECIAL ISSUE
A GUIDE FOR
ATTORNEYS
TO HELP VETERANS
AND MEMBERS OF
THE ARMED FORCES
E X C L U S I V E LY
FA M I LY L AW
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Special laws may ease the path to permanent residency and citizenship for
military veterans and their families
35 Families at War
BY MARLO VAN OORSCHOT AND RITA AZIZI
When a service member is involved in a divorce, family law attorneys must
consider the interplay between state and federal laws
Plus: Earn MCLE credit. MCLE Test No. 219 appears on page 37.
43 Good Paper
BY TERESA PANEPINTO
Veterans with less-than-honorable discharges may be able to upgrade their
papers by appealing to review boards
48 Special Section
Semiannual Guide to Expert Witnesses
Los Angeles Lawyer D E PA RT M E N T S
the magazine of
the Los Angeles County 10 Tax Tips 28 Practice Tips
State taxation and tax protection for Unemployment benefits for veterans
Bar Association
military families under the UCX program
November 2012
BY LIEUTENANT COLONEL EVAN M. STONE BY JUDGE IRINA F. TENTSER
Volume 35, No. 8
16 Practice Tips 76 Closing Argument
Employment and reemployment rights An opportunity for attorneys to advocate
COVER ILLUSTRATION:
MICHAEL CALLOWAY
of veterans for America’s veterans
BY TAMIKA L. BUTLER BY JURA A. HARTLEY
22 Practice Tips 74 Index to Advertisers
Equitable tolling at the U.S. Court of
Veterans Claims 75 CLE Preview
BY KRISTINA L. DERRO
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4 Los Angeles Lawyer November 2012
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6 Los Angeles Lawyer November 2012
JUDGE
LAWRENCE W. CRISPO
(RETIRED)
W
hen this issue reaches you in early November,
Election Day will likely have come and gone,
and Veteran’s Day and Thanksgiving Day will be
approaching. Do you ever ponder what to be thankful for?
Is it your family’s peace, safety, and health? Is it your ability
to speak your mind without censorship? Is it your ability to vote for the president
of your choice? All these are safeguarded by the 1 percent of the people in the coun-
try who are currently defending us and protecting our safety—our active military
service members. They, their families, and all the nation’s military veterans don’t ask
for much. Most don’t ask for glory or to be compared to heroes. Most just want to
come home to their families and enjoy the protection that everyone else does.
The difficulty is that a lot of the time they receive much less than what they deserve.
Mediator Arbitrator Veterans have many concerns, including lack of benefits, lack of access to health-
care, unemployment (especially among the 9/11 veterans, which is higher than the
national average for veterans) and homelessness (again especially among the 9/11
veterans). The news is filled with stories about our military community needing help.
Referee That’s where we as lawyers can step in and advocate for our clients who have sac-
rificed so dearly. The articles in this issue cover a small sampling of the legal prob-
213.926.6665 lems facing our service members and offer some solutions to those problems. The
www.judgecrispo.com topics range from access to benefits to immigration status to criminal defense. This
issue is offered as a guide to understanding the breadth of matters faced by our ser-
vice members and their families and how to help.
Los Angeles County is on the forefront. It created one of the first veterans courts
in the country (as you can read about in “An Innovative Court for Veterans in Los
ERISA LAWYERS
Angeles County,” by Ben Gales and Paul Freese), and the Los Angeles County Bar
Association recently started an Armed Forces Committee (AFC), whose primary mis-
sion is to help our active-duty, reserve, national guard, and military veterans by increas-
ing access to pro bono and low-cost legal services through LACBA programs and
activities. To date, the AFC has worked in coordination with other LACBA com-
LONG TERM DISABILITY, LONG mittees in identifying and coordinating services for veterans among existing programs,
TERM CARE, HEALTH, agencies, pro bono clinics, and other resources. Members of the AFC recently cre-
EATING DISORDER, AND LIFE
ated the Parole Board Boot Camp that taught approximately 75 local attorneys how
INSURANCE CLAIMS
to represent veterans at parole board hearings.
In addition, and as part of its effort to increase access, the AFC will hold its first
ERISA & BAD FAITH military ball on November 17. The proceeds raised will support the work of LACBA
MATTERS in serving veterans in Los Angeles County.
All of us know or have known someone who has served our country. We, the
✔ California state and federal courts Veterans and Armed Forces Law Special Issue’s coordinating editors are no excep-
✔ More than 20 years experience tion. We have served in the military, have family that has served in the military, and
✔ Settlements, trials and appeals serve by aiding those who have. What we all have in common is an understanding
of the sacrifices made by those who protect the rest of us. What better way to show
Referral fees as allowed by
our thanks than to educate others in their legal issues and help point out solutions.
State Bar of California
To our readers who are serving or have served, thank you for your service. We still
need your help.
Kantor & Kantor LLP .
818.886.2525 TOLL FREE
877.783.8686
www.kantorlaw.net
Dennis L. Perez is a principal in Hochman, Salkin, Rettig, Toscher & Perez, PC. He is the
2012-13 chair of the Los Angeles Lawyer Editorial Board. Sharon Glancz is a transactional attor-
ney at NBCUniversal Television Distribution and a member of LACBA’s Armed Forces
Committee. Jeffrey A. Hartwick practices business litigation in Torrance and is a former
U.S. Navy officer. Perez, Glancz, and Hartwick are the coordinating editors of this special issue.
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State Taxation and Tax Protection for Military Families
MILITARY SERVICE OFTEN REQUIRES people to work and live in a deciding which state is the domicile.
state other than their home state. As a result, service members often A state’s power to tax, some states’ special treatment for military
have tangled connections to multiple tax jurisdictions. Federal law income, and federal law preventing double state taxation all seem like
is designed to protect the choice of domicile of active-duty military simple concepts until one asks a military member, “Where are you
members and their spouses, but confusion over the law reigns, and, from?” A Captain Jane Doe may answer that her “home of record”
as a result, various states may pursue income tax deficiencies against is San Diego, but she had been “residing” in Virginia during her tour
service members. Although some states do not tax income at all,1 other at the Pentagon before her year of deployment to Afghanistan. She
states (including California) treat military members as nonresidents thinks her “legal residence” is Texas, because she owns a house in San
for tax purposes if they are absent from the state, and therefore only Antonio and her military pay stub indicates Texas. She holds a Texas
tax active-duty military domiciliaries on income earned while they are driver’s license, but her new car is registered in Virginia. She most
permanently stationed in California.2 If they are
permanently assigned outside the state, they
become nonresidents of California for income
tax purposes and are not taxed on income States are within their authority to critically examine service
earned while out of state.3 But other states do
not confer this immunity from taxation. So, if
a domiciliary from such a state is assigned to members’ claims of SCRA-protected out-of-state domicile.
duty in California, it may trigger a taxable
residency claim, and both states could assert
income tax jurisdiction. recently voted absentee in Texas but then registered to vote in
The Servicemembers Civil Relief Act (SCRA) protects service Virginia. She may add that her husband is from Michigan, but he spent
members from various civil legal processes that could adversely affect the last year working in Virginia while she was deployed. They are
them while they are away from their homes serving the United moving to Fort Irwin, California, on permanent orders next month.
States.4 The SCRA postpones or suspends various civil obligations per- She might believe she is a resident of California, because she was born
taining to leases, credit card interest, mortgage foreclosures, judicial in San Diego and lived there her entire life until she joined the Army.
proceedings, and state income tax. Section 571 of the SCRA (residence She is adamant that her “domicile” for the last year was Kabul,
for tax purposes) specifically protects service members from double because she seeks the combat-zone tax exclusion.9
state taxation of income and personal property. The provision pre-
vents the loss or acquisition of a military member’s domicile due to The Concept of Domicile
the presence or absence in a tax jurisdiction by reason of military Service members, their family members, and tax administrators fre-
orders.5 Previously, military spouses had never been granted the quently confuse home of record, legal residence, and domicile. The
same protections, which complicated joint returns. However, the key to determining which state, if any, can tax Captain Doe’s or her
Married Spouses Residency Relief Act (MSRRA) of 2009 amended husband’s income requires a clear understanding of these terms, the
the SCRA and extended similar protection to certain military spouses.6 most important of which is “domicile.”
The SCRA provides: “Domicile” means a person’s true, fixed, and permanent home,
A service member shall neither lose nor acquire a residence or to which that person intends to return and remain even though cur-
domicile for purposes of taxation with respect to the person, rently residing elsewhere.10 It differs from residence, which is the place
personal property or income of the service member by reason one is actually living for an undetermined period and is not necessarily
of being absent or present in any tax jurisdiction of the United combined with the intent to stay permanently.11 As noted, the SCRA
States in compliance with military orders.…7 treats “residence” and “domicile” interchangeably due to the fact that
Compensation of a service member for military service some states equate the two or, in the case of California, assert tax juris-
shall not be deemed to be income for services performed or from diction over statutory residents who may not be domiciled in
sources within a tax jurisdiction of the United States if the ser- California.12 The issue of domicile is largely determined based on a
vice member is not a resident or domiciliary of the jurisdiction person’s intent. If a person has physically lived in a place, the issue
in which the service member is serving in compliance with mil- is always whether the person intends to remain or return to that place.
itary orders.8
Thus, a service member’s military compensation is protected from Lieutenant Colonel Evan M. Stone is the executive director of the Armed
double income taxation under the fiction that the income is earned Forces Tax Council at the Office of the Secretary of Defense. The views
only in the state of domicile regardless of where it is actually earned. expressed are those of the author and not the Judge Advocate General’s
The issue for both the service member and state taxing authority is Corps, the U.S. Army, or the Department of Defense.
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© 2012 JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender.The subjectivity of intent often requires courts income. Should Virginia or California attempt registered his car, held a driver’s license, and
to look at objective factors and draw con- to tax her income, she will have the burden voted in Nevada. His mistake was not main-
clusions that may conflict with what a service of establishing her intent to return to Texas taining those ties. The lesson from this case
member believes to be his or her domicile. through strong indicia of domicile. is that a bare assertion of domicile, without
Courts consider indicia of domicile when One of the most common issues pitting conduct to back it up, is not enough. In addi-
analyzing whether a person intends to per- military members and state tax authorities tion, if a service member allows his or her
manently reside somewhere. The applicable against each other is the double nontaxation domicile to lapse, the SCRA will not act as a
factors include physical presence, payment of issue. Service members often legitimately shield against his or her future actions in a
taxes, ownership of real property, voter reg- assert a domicile in a state that does not have new state that establish ties to that state.
istration, vehicle registration, driver’s license, an income tax.15 Too often, however, the Had Chief Carr maintained strong ties with
professional licenses, declarations of resi- concept is misunderstood and confused with Nevada, buying a house and registering vehi-
dence in legal documents, and declaration home of record, or the belief that the mem- cles while residing in Oregon might arguably
of domicile in affidavits or litigation. 13 ber may simply assert a given state as the not have been sufficient to establish tax juris-
Military people move a lot. They often estab- member’s domicile without establishing or diction there.19 But in the absence of evi-
lish indicia of domicile in multiple places. maintaining indicia of domicile. The Oregon dence connecting him to any other state, it
Captain Doe likely resided in Afghanistan Tax Court faced this situation in Carr v. was enough for the court to declare him an
during her physical deployment, but proba- Department of Revenue.16 Oregon domiciliary.
bly does not intend to return permanently. Navy Senior Chief Carr entered active In Palandech v. Department of Revenue,20
Sorting out domicile requires a close look at duty in 1980 in Las Vegas, Nevada, and the Oregon Tax Court again faced the issue
the facts and knowledge of the various terms. served for 25 years, ultimately retiring in Or- of double nontaxation, but, although the ties
One of the most misunderstood terms is the egon.17 He served in Portland, Oregon, from to the non-income tax state were stronger, the
“home of record.” 1993 to 1996 before he transferred to Cali- court similarly concluded that Oregon had
“Home of record” refers to the place from fornia, where he remained until 1999.18 He taxing jurisdiction over the service member.
which a person was appointed or enlisted was reassigned to Oregon in 1999, where he Palandech was a dentist with the Public
into the military. It is used to determine a per- remained until he retired in 2005. Oregon Health Service (PHS), and he lived in Oregon,
son’s maximum travel and transportation assessed personal income tax for the 2001, Washington, New Mexico, Arizona, and
entitlement upon leaving military service. It 2002, and 2003 tax years. The issue was Oregon again throughout his career. He estab-
may or may not be the same as one’s domi- whether Chief Carr sufficiently established lished and essentially severed ties with each
cile or residence. Captain Doe claims San domicile in Oregon subjecting him to taxation state along the way. In his final assignment in
Diego as her home of record. This only means despite his being there as an active-duty ser- Oregon, he claimed a Washington domicile,
that she entered the service in San Diego, vice person and claiming Nevada (a state but Oregon disagreed and assessed personal
and if she leaves the service at Fort Bragg, without income tax) as his domicile. The income tax for years 2004, 2005, and 2006.
North Carolina, her transportation and travel court found that Chief Carr had established Palandech was born and raised in Ca-
entitlement will be the value it takes to move a new domicile in Oregon and upheld the tax lifornia. He completed dental school in Illinois
her and her goods from Fort Bragg back to assessment. and in 1980 established himself in Oregon. He
San Diego. However, if she entered military The SCRA, (as did its predecessor, the bought a home, obtained a dental license
service from college at the University of North Soldiers and Sailors Civil Relief Act) provide and a driver’s license, and practiced dentistry
Carolina, the military would only pay the that a member neither loses nor acquires tax in Oregon. In 1984 he joined the PHS and
value of moving her and her goods from Fort domicile by being present in or absent from remained in Oregon until he was assigned to
Bragg, North Carolina, to Chapel Hill, North a state solely due to military orders. The Washington in 1989.21 Once in Washington,
Carolina. When service members speak of court rightly observed that while the act of Palandech established ties there. He regis-
their “home of record,” they may mean their being posted to a state does not change domi- tered to vote, obtained a driver’s license, reg-
hometown, their home state, or perhaps cile, a state can and often does look at other istered his cars, and declared Washington his
where they entered service, but one should be factors that might establish domicile, even legal residence for state income tax with-
very cautious about equating it with domicile. unknowingly. In this case, Chief Carr bought holding. He also sold his Oregon house and
“Legal residence” is another term some- a house in Oregon in 2001 and registered his rented a house in Washington.22 He was reas-
times equated with domicile; the terms are vehicles in Oregon. He maintained no ties signed to New Mexico in 1991 and then to
often used interchangeably.14 Captain Doe with Nevada other than some extended fam- Arizona in 1993, where he remained until
resided in Virginia while working at the ily living there. He did not own property in 1998. During this time, he purchased unim-
Pentagon and she “resided” in Afghanistan Nevada, hold a Nevada driver’s license, reg- proved land as an investment in Oregon with
while deployed there. It would seem she also ister his vehicles, or vote in Nevada. More- the possible intent to build a house. But he
resided in Texas at some point in the past. As over, in a 1999 bankruptcy filing, he listed also bought a house in Arizona, and turned
long as she was or is physically present in a California as his domicile. Faced with almost on utilities, telephone service, and enrolled his
place, she is residing there. But domicile, its no evidence of ties to Nevada or any other children in school. He also opened bank
protectable status under the SCRA, and the state, the court concluded that purchasing a accounts in Arizona.23 When Palandech was
power to tax domiciliaries turn on intent to home and registering vehicles in Oregon, reassigned back to Oregon in 1998, he sold
remain or return. Captain Doe called Texas though tenuous, was the strongest indicia of his Arizona house and bought a five-bed-
her “legal residence.” It appears she believes domicile to any state. room house in Salem, Oregon. The entire
Texas is her domicile, because she owns a This case turned more on Chief Carr sev- time, he maintained his Washington driver’s
house, has a driver’s license, and votes in ering his ties with Nevada than on his affir- license and voting registration.24 The issue
Texas. She also lists Texas as her withhold- matively establishing domicile in Oregon. once again was to determine the true location
ing state on her military pay statement. Chief Carr likely confused home of record and of his domicile through examining overt indi-
Captain Doe may also be claiming Texas as domicile. He enlisted in Nevada, and at the cia of domicile and inferring intent.
her legal residence because Texas does not tax time it probably was his domicile. He likely The court concluded that the case was a
12 Los Angeles Lawyer November 2012“straightforward” residency case.25 The court The SCRA domicile issue historically favored status. But during her time in Virginia,
accepted the premise that Palandech’s initial applied just to the service member. However, Captain Jones registered a new car and reg-
Oregon domicile was protected by the SCRA. with the passage of the MSRRA, states are istered to vote. She may have put herself at
Thus, Palandech would neither lose Oregon faced with out-of-state domicile assertions risk with Virginia, which could challenge her
domicile nor acquire Washington domicile from military spouses. Thus, the issue of claim of Texas domicile. If Captain Doe hopes
simply by residing in Washington in accor- domicile will become even more subject to to rely on SRCA protecting her Texas domi-
dance with military orders. But the court debate as states also have to establish the cile when she moves to California, she is best
concluded that Palandech abandoned Oregon ability to tax military spouses’ income. advised to register her car in Texas, reregis-
and intended to acquire Washington as his Under the MSRRA and California law, ter to vote in Texas, and take other steps to
domicile after looking at several key factors “a nonmilitary spouse of a military service- indicate her intent to return, if that is the
such as selling his Oregon house, obtaining member shall neither lose nor acquire a resi- case. Otherwise, she could also be at risk for
a Washington driver’s license, registering to dence or domicile for tax purposes by being a domicile challenge in California. As noted
vote, registering his autos, and declaring absent from or present in California to be in Palandech, subsequent moves and subse-
Washington as his domicile for income tax with the servicemember serving in compli- quent actions can function to change domi-
withholding.26 Unfortunately for Palandech, ance with military orders if the servicemem- cile, even unwittingly.
the court performed the same analysis when ber and the spouse have the same domicile.”28 Likewise, determining her husband’s domi-
he moved back to Oregon in 1998. The court While the law affords the same domicile pro- cile is the first step in determining his tax
cited the unimproved lot purchased in Salem tection (and pitfalls) as the SCRA, to qualify, liability and whether he could claim protec-
with the intent to build, the house purchase, California has three requirements: 1) the tion under the MSRRA upon their move to
opening of bank accounts, registration of spouse must be present or absent in California California. His domicile is not clear from
autos, Palandech’s active Oregon dental to be with the service member spouse, 2) the the facts. It could be Michigan, it could be
license, moonlighting as a dentist in Oregon service member must be in compliance with Virginia, or it could be Texas. One should ask
while on active duty, and his family members military orders, and 3) the service member and where and when they were married and what
living in Oregon as the basis for finding spouse must have the same domicile.29 For indicia of domicile he has with each state. To
Oregon domicile. example, while stationed in Texas, a service receive MSRRA protection from California
Unlike Carr, in which no ties to Nevada member who is a Texas domiciliary marries taxation, he will have to travel to California
remained and only tenuous ties to Oregon a civilian spouse who is also a Texas domi- to be with his military spouse pursuant to her
existed, the Palandech court was not so apolo- ciliary. Next, the service member receives military orders. Moreover, they both must
getic in finding Oregon domicile. Although orders to move to California, and the spouse arrive with the same domicile, whether Texas
Palandech kept his Washington driver’s license moves in order to be with him or her. The or Virginia. Unless those elements are met, he
and voter registration—two strong indicia spouse could claim MSRRA protection and would not receive MSRRA protection.
of domicile, the court saw this as a veneer. It California would not tax the spouse’s income Servicemembers have significant tax ben-
believed that his other affirmative actions in earned in California, because both had the efits,30 but state income taxation based on
Oregon reflected his true intent to remain in same domicile of Texas and the spouse moved domicile is often a confusing factual maze to
Oregon. In addition, the court noted that to California to be with a service-member navigate—especially with constant moves
Palandech purchased the unimproved lot in spouse. However, as seen in Carr and Palan- from one state taxing jurisdiction to another.
Oregon, not Washington, and he registered his dech, the burden of establishing and main- The multiple moves and misunderstanding of
autos in Oregon, not Washington. Arguably taining strong Texas indicia of domicile is on terms and law can place tax authorities and
the Washington ties could have led the court the member and his or her spouse. This out- service members at odds over the issue of
to find that the Washington domicile was come could change if the service member state income taxation. Now more than ever,
not lost in moving to Oregon, but the court moved to California and then married a as states scramble to find income, service
noted that when Palandech moved to Arizona, California domiciled spouse or married a members and their spouses need to under-
he closed his Washington bank accounts. The Michigan domiciled spouse. In those cases, the stand the basic rules for establishing and
court simply did not believe that Palandech “same domicile” prong would fail. It is impor- maintaining a legitimate domicile. Although
intended to return to Washington. tant to remember that just like the service the SCRA, and now the MSRRA protect ser-
Carr and Palandech highlight several con- member, the spouse cannot simply choose a vice members and their spouses from gaining
cepts about the SCRA. First, the SCRA is convenient domicile. The spouse is subject to or losing domicile, tax authorities have shown
meant to protect a service member from dou- the same domicile scrutiny as the service mem- they may be paying more attention to the
ble state income taxation. Military members ber when asserting a given jurisdiction. rules than are the service members. Service
often establish domiciles in states that do Recall Captain Doe and her answer to, members and their tax advisers would ben-
not have income tax,27 creating a double “Where are you from?” If she is on her way efit greatly by fully understanding what it
nontaxation benefit. Second, as these cases to California with her husband, how would takes to establish, maintain, and defend a
show, the burden is on the service member to one advise her regarding state income tax domicile under the SRCA and MSRRA. ■
establish and maintain legitimate domicile liability for 2012? The first step would be to
through indicia of domicile or else be subject determine her domicile. While she was born 1 See http://www.taxadmin.org/fta/rate/mil_chart03
to challenge. It is not enough to simply declare in California and entered the service there, she .htm. Alaska, Florida, Nevada, South Dakota, Texas,
a tax-favored jurisdiction, nor is it enough to offers no further evidence that she main- Washington, and Wyoming do not have a broad-based
state income tax. Id.
make a half-hearted effort at maintaining tained a California domicile once she left the 2 S TATE OF C ALIFORNIA F RANCHISE T AX B OARD
the tax-favored domicile. Third, as the Ore- state. Her strongest indicia of domicile comes PUBLICATION 1032, TAX INFORMATION FOR MILITARY
gon Department of Revenue has demon- from Texas, where she owns real property, PERSONNEL (2011).
3 Orders for more than 179 days are considered per-
strated, states are within their authority to holds a driver’s license, voted, and declared
critically examine service members’ claims Texas as her state for income tax withhold- manent change of station (PCS) orders. Orders for
179 days or less are considered temporary duty orders
of SCRA-protected out-of-state domicile and ing. As noted, Texas is a common domicile
(TDY). California residents out of the state on TDY
overt acts within their state. among service members because of its tax-
14 Los Angeles Lawyer November 2012orders are still considered residents for income tax 11 BLACK’S LAW DICTIONARY 1423 (9th ed. rev. 2009) effect a change in domicile: 1) residence in another
purposes. (defining residence as the place where one actually place, 2) intent to abandon old domicile, and 3) intent
4 The SCRA was originally called the Soldiers and lives, as distinguished from domicile). to acquire new domicile).
Sailors Civil Relief Act of 1940, amended in 2003 and 12 REV. & TAX. CODE §17016 (2012) (establishing a 27 Supra note 1.
2009 and codified at 50 U.S.C. app. §§501-596. Section rebuttable presumption of residency for every indi- 28 50 U.S.C. app. §571(a)(2) and (c); S TATE OF
571 (tax residence) is the former §574 and remains sub- vidual who spends in aggregate more than nine months CALIFORNIA FRANCHISE TAX BOARD PUBLICATION 1032,
stantially the same. of the taxable year within California). TAX INFORMATION FOR MILITARY PERSONNEL (2011).
5 50 U.S.C. app. §571; See Dameron v. Brodhead, 13 Other factors include expressed intent, residence of Unlike the SCRA, which only protects military income
345, U.S. 322 (1953) (upholding the constitutionality immediate family members, location of schools attended of the service member from taxation, the MSRRA
of SSCRA §574, the forerunner state tax provision). by children, leasehold interests, situs of personal prop- protects all income for services performed. Id.
This article focuses on income tax, not personal prop- erty, location of bank and investment accounts, home 29 S TATE OF C ALIFORNIA F RANCHISE T AX B OARD
erty, but note that intangible personal property includes of record, place of marriage, and spouse’s domicile. PUBLICATION 1032, TAX INFORMATION FOR MILITARY
bank accounts, stocks, etc., which could become rele- 14 See e.g. DD Form 2058, State of Legal Residence PERSONNEL (2011). It should be noted that although the
vant for income tax purposes. Certificate (explaining that domicile and legal resi- rules applying SCRA are set forth in REV.& TAX CODE
6 The Married Spouses Residency Relief Act, Pub. L. dence are essentially interchangeable). This form is §17140.5, the rules relating to MSRRA have not been
No. 111-97 (2009) (adding provisions protecting filled out by service members and instructs the defense codified in the REV. & TAX CODE. It would appear,
spouses of military members losing or acquiring domi- finance accounting office as to the state for which therefore, that the Franchise Tax Board has adopted
cile by reason of being present in or absent from a tax income taxes will be withheld from wages, if any. MSRRA as a matter of tax policy and affords its ben-
jurisdiction solely to be with a service member in com- 15 Supra note 1. efits to the spouses of service members.
pliance with the service member’s military orders). 16 Carr v. Department of Revenue, 2005 Ore. Tax 30 For example, I.R.C. §112 excludes compensation
7 50 U.S.C. app. §571(a)(1). LEXIS 223. received for active service in a combat zone. Other com-
8 50 U.S.C. app. §571(b). Note that nonmilitary income 17 Id. at 1. bat-zone-related tax benefits include but are not lim-
is not protected and can be taxed by the state of domi- 18 Id. ited to: I.R.C. §104(a)(4) (excluding combat-related dis-
cile and the state in which the income is earned. 19 See Matter of Karsten, 924 P. 2d 1272 (Kan. App. ability payments), I.R.C. §134(b)(6) (excluding state
9 I.R.C. §112 (excluding from gross income compen- 1996) (Purchasing a house or registering a motor vehi- payments due to service in a combat zone), I.R.C.
sation earned for active service in a combat zone). See cle in a host jurisdiction does not automatically change §692(a) (tax forgiveness if a member dies in a combat
also REV. & TAX CODE §17131 (2012) (adopting a service member’s domicile unless the service member zone), I.R.C. §2201 (reduced estate tax liability), I.R.C.
I.R.C. §112); Evan M. Stone, Combat Zone Tax indicates intent to change domicile.). §4253(d) (no excise tax on phone calls originating in
Exclusion, CALIFORNIA TAX LAWYER, Winter 2012. 20 Palandech v. Department of Revenue, 2011, Ore. a combat zone), and I.R.C. §7508(a) (180-day auto-
10 BLACK’S LAW DICTIONARY 559 (9th ed. rev. 2009) Tax. LEXIS 146. matic extension of time to file and pay income tax). The
(defining domiciliary as a person who resides in a par- 21 Id. at 2. I.R.C. provides many other noncombat-related tax
ticular place with the intention of making it a princi- 22 Id. at 3. benefits to service members, such as I.R.C. §217(g)
pal place of abode); See also Mitchell v. United States, 23 Id. at 5. (moving and storage), I.R.C. §134 (exclusion of qual-
88 U.S. 350, 352 (1874) (defining domicile as a resi- 24 Id. ified military benefits, e.g., BAH/BAS), I.R.C. §265(a)
dence at a particular place accompanied with a posi- 25 Id. at 7. (tax-exempt income not subject to apportionment/allo-
tive or presumptive proof of an intention to remain 26 Id. at 22. See White v. Department of Revenue 14, cation), and I.R.C. §121 (expanded time for gain
there for an unlimited time). OTR 319, 321 (1998) (establishing a three-part test to exclusion on the sale of principal residence).
Los Angeles Lawyer November 2012 15practice tips BY TAMIKA L. BUTLER
Employment and Reemployment Rights of Veterans
IN 2010, APPROXIMATELY 21.8 MILLION VETERANS lived in the terminate upon the occurrence of any disqualifying service.12 For exam-
United States.1 Half of these veterans served during World War II, the ple, a service member is disqualified for reemployment benefits if he
Korean War, and the Vietnam era.2 Gulf War II veterans—those or she separated from the service with a dishonorable or bad conduct
who have served since September 2001—amount to nearly 1 in 10 discharge, separated from the service under other than honorable con-
of the veteran population,3 and they have a higher unemployment rate ditions, or was dismissed as a commissioned officer under situations
than veterans from all other service periods.4 involving a court martial or by order of the president in time of war.13
Veterans have proudly served the United States around the world Although returning service members have reemployment rights, this
during war and peace, but often return home to find themselves benefit comes with certain responsibilities. Under USERRA, service
unemployed. Those who employ veterans provide valuable assis- members must give their employer advance notice of the leave and their
tance but need to be aware of the rights and responsibilities of hir- intent to return.14 This notification may be either verbal or in writing.
ing those who have served this country. Presently, tax credits are one However, if the soldier is shipped out before having a chance to give
of the benefits of hiring veterans. For example, under the Returning adequate notice to the employer, the notice requirement may be
Heroes Tax Credit, employers are credited up to $2,400 for hiring vet- delayed or waived. Delay or waiver is granted when notice was impos-
erans who have been unemployed for at least four weeks. If employ- sible, unreasonable, or precluded by military necessity.15 Military
ers hire veterans who have been unemployed for more than six necessity is determined “pursuant to regulations prescribed by the
months, that credit increases to up to $5,600. The Work Opportunity Secretary of Defense and shall not be subject to judicial review.”16
Tax Credit gives employers who hire veterans with service-related dis- When the service member returns from deployment, it is his or her
abilities up to a $4,800 credit. However, these credits expire at the responsibility to report back to work. How this is to be done depends
end of 2012, and there is currently no news of an extension.5 on how long the member was away from work.17 If the service mem-
The Uniformed Services Employment and Re-Employment Rights ber was absent from work for less than 31 days, the member must
Act (USERRA)6 was enacted in 1994 with three purposes. The first return to work the first full day following completion of military ser-
was to encourage non-career military service by reducing its disad- vice, not including time to travel home and an eight-hour rest period.
vantages. Second, Congress hoped to minimize the disruption to the If the member was absent from work between 31 and 180 days, the
lives of those in the armed services as well as to their employers, their member must submit an application for reemployment within 14 days
fellow employees, and their communities, by facilitating prompt of the completion of military service. If the absence from work was
reemployment upon completion of service. Finally, Congress enacted more than 180 days, the service member must submit an application
USERRA to prevent discrimination against service members due to for reemployment within 90 days of the completion of military ser-
their military status or obligations.7 As articulated by the U.S. vice. If the service member sustained injury while on military duty,
Department of Labor, “The law is intended to encourage non-career he or she has up to two additional years to seek reinstatement.18 This
uniformed service so that America can enjoy the protection of those two-year period can be increased to allow for circumstances beyond
services, staffed by qualified people, while maintaining a balance with the member’s control in which reporting back to work would be
the needs of private and public employers who also depend on these “impossible or unreasonable.”19 It is important for employers to
same individuals.”8 remember that because reservists must be rehired, the “application”
is actually a notice of the intent to return to work rather than a new
Employment and Reemployment Rights job application.
USERRA extends reemployment rights to persons who have been Once a service member seeks reemployment, the question for the
absent from a position of employment because of “service in the uni- employer is often where to place the returning employee. While sol-
formed services.”9 Specifically, it guarantees a veteran who is return- diers are away on duty, their employers must continue to run busi-
ing from military service or training the right to be reemployed at his nesses back home. During the period of deployment, additional hires
or her former job (or as nearly comparable a job as possible) with the may have been made or—given the current economy—jobs may
same benefits, subject to conditions. Unlike other employment laws have been eliminated. This places employers in the difficult situation
that often require a minimum number of employees to be applicable, of determining how to reintegrate the returning employee. This may
USERRA applies to employers regardless of the number of employ- involve more than merely returning an employee to a former position.
ees.10 To be eligible under USERRA, a service member’s absence For instance, under USERRA, the corporate ladder may become an
from work cannot exceed five years cumulatively. There are eight escalator. The “escalator position” requires that the returning service
exceptions to the five-year period that cover situations outside the vet-
eran’s control, such as an involuntary order to remain on active duty Tamika L. Butler has represented military service members and their fami-
during a domestic emergency or periodic required trainings for lies on sexual discrimination and employment issues. She would like to
reservists and National Guard members.11 thank her colleague Elizabeth Kristen and law clerks Katherine Zhao and Martin
The reemployment benefits provided to veterans by USERRA Quiñones for their assistance with this article.
16 Los Angeles Lawyer November 2012member be placed in the position he or she more severe the disability, the less likelihood ber will be on active duty more than 30 days,
would have occupied with reasonable cer- that the veteran will find employment.27 coverage in another plan through the special
tainty if the employee had remained contin- Similar to the Americans with Disabilities enrollment may be cheaper than COBRA
uously employed, including any pay raises and Act (ADA), USERRA requires an employer to continuation coverage.
promotions.20 provide returning service members with rea- Under USERRA, a service member’s pen-
In other words, if an employer is ques- sonable accommodations.28 These accom- sion plan should be unaffected by military
tioning whether it can place a returning ser- modations can include reconfiguring a work- leave; military service must be considered
vice member in a lower position than the space, such as adjusting the height of a desk service with the employer for vesting and
member was in before he or she left, the for a person in a wheelchair, as well as pro- benefit accrual purposes.38 If employee con-
answer in most circumstances will be no. An viding leave for disability-related treatment or tributions are required, the service member
employer is required to place a returning ser- recuperation.29 Unlike the ADA, USERRA must be given the opportunity to make up any
vice member in the position the member also requires employers to engage in reason- missed contributions within a period of over
would have been in if he or she had not left, able efforts to assist a veteran during the three times the length of military service but
as long as the service member is qualified for application process regardless of whether the not more than five years.39
the job or can become qualified after rea- veteran has a service-connected disability.30 Although employers may provide paid
sonable efforts are made by the employer to Assistance can include helping the veteran days for military leave, they are not required
help him or her become qualified. Ad- become qualified for employment and can to do so.40 Employers that pay an employee
ditionally, the reemployment must be prompt take the form of training or retraining for a while on military leave, however, are required
or as soon as practicable under the circum- position.31 to uniformly extend that policy to all eligible
stances.21 USERRA also differs from the ADA in military personnel under USERRA, including
USERRA provides another protection to that, if a service member does not qualify reservists ordered into active duty.41 An
employees that could raise liability concerns for a previous position due to service-related employer may not require service members to
for employers. Although many employees in disabilities, the employer must transfer the use vacation time while away on a military
California are “at will” and can be fired for employee to another position with equivalent leave of absence. However, the employer can-
any reason as long as it is not discriminatory seniority, status, and pay, if such position is not stop the service member from utilizing
(i.e., on the basis of race, sex, gender, sexual available.32 paid vacation time if the employee chooses to
orientation, gender expression, religion, While USERRA requires employees and do so.42
national origin, etc.) or for reasons in viola- employers to engage in certain actions before While USERRA provides a variety of reem-
tion of public policy (e.g., reporting an unsafe and after a service member actively serves, it ployment protections to employees, the law is
work condition), military service may change also requires that an employer continue to not without employer defenses. An employer
an employee’s at-will employment status. A provide certain benefits while he or she is does not have to reemploy a person if the
person reemployed under USERRA cannot be serving. An employee who serves in the uni- employer’s circumstances have changed to
discharged, except for cause, within one year formed services for 30 days or less only has make reemployment impossible or unrea-
after the date of reemployment if the period to pay his or her share, if any, of the health sonable, if reemployment would impose an
of service was over 180 days.22 A reemployed coverage.33 The service member then may undue hardship on the employer, or if the
service member cannot be discharged within elect to continue health coverage under the preservice position was for a brief or nonre-
180 days after the date of reemployment, Consolidated Omnibus Budget Reconciliation current period and there was no reasonable
except for cause, if the period of service was Act (COBRA) for up to 24 months or until expectation that such employment would
more than 30 days but less than 181 days.23 one day after he or she fails to apply for a continue indefinitely or for a significant period.
Employers should also be aware that employ- return to work, whichever period is shorter.34 In each of these cases, a service member plain-
ees who feel their rights under USERRA have Under no circumstances can the service mem- tiff has the initial burden of showing by a
been violated have no statute of limitations ber be required to pay more than 102 percent preponderance of the evidence that his or her
by which they must file a complaint with the of the full premium for the health cover- military service was a substantial or motivat-
Department of Labor or with the Veterans age.35 If the service member is on active duty ing factor in the adverse employment action.
Employment and Training Service or file a pri- for more than 30 days, the member and The burden then shifts to the employer to
vate action in court.24 dependents should be eligible for coverage by prove that the reason provided for the adverse
military healthcare and can contact his or action was not a pretext. If an employer is
Accommodating Disabilities her military unit for additional information. found liable for violations of USERRA, it
Qualifying returning service members for a In addition, the Health Insurance Port- may be liable for various damages, including
job is further complicated when an employee ability and Accountability Act (HIPAA) may lost wages, lost benefits, and liquidated dam-
returns to work with a disability sustained in give the service member and his or her fam- ages equaling lost wages and lost benefits.
the course of military service. Statistics show ily rights to enroll in another group’s health
that veterans with service-incurred disabilities plan, such as the health plan provided to the The Family and Medical Leave Act
are less likely to be employed than veterans member’s spouse. The service member has an Most employers are generally familiar with
without disabilities.25 A 2009 U.S. Bureau of opportunity to enroll regardless of the health the Family and Medical Leave Act (FMLA).
Labor study found that among veterans who plan’s applicable enrollment periods.36 To The law provides certain employees with the
had served since August 1990, 70.7 percent of qualify, the service member must request right to take an unpaid, 12-week, job-pro-
disabled veterans were employed, compared enrollment in the other plan within 30 days tected leave to care for their own serious
with 81.9 percent of veterans without a ser- of losing eligibility for coverage under his or health condition or to care for a family mem-
vice-related disability.26 Furthermore, only her current employer’s plan.37 After that spe- ber who has a serious health condition. The
55.8 percent of veterans with a disability rat- cial enrollment is requested, the service mem- FMLA also makes it illegal for employers to
ing of 60 percent or more on the rating scale ber must be covered in the other plan no later interfere with an employee’s right to take the
used by the Department of Veterans Affairs than the first day of the first month following leave, to harass an employee for taking the
(V.A.) were employed, which suggests the the request for enrollment. If the service mem- leave, to deny a valid leave request, or to
18 Los Angeles Lawyer November 2012refuse to hire or promote an employee for tak- days.46 Proposed changes to military care- who incur any service-related disability
ing or planning to take the leave. The law fur- giver leave would allow family members of regardless of whether the disability would
ther prohibits retaliation against employees veterans to take a leave of absence from work be protected under the ADAAA or Californ-
who take a FMLA qualifying leave. to care for the veteran’s serious injury or ill- ia’s equivalent, the Fair Employment and
In 2009, the FMLA was amended to ness for up to five years after the service mem- Housing Act (FEHA). To enforce violations
include two new types of leave for eligible ber’s discharge. of the ADAAA or FEHA, employees must ex-
family of service members—exigency leave To enforce the FMLA, an employee can haust the administrative requirements by fil-
and military caregiver leave. Exigency leave bring a private lawsuit or file a complaint with ing ADAAA violation complaints with the
provides up to 12 weeks of leave for situa- the Department of Labor within two years of Equal Employment Opportunity Commission
tions arising out of the military member’s the violation or within three years if the vio- within 300 days of the violation and by fil-
deployment, service, injury, reintegration, lation was willful. The FMLA military exi- ing FEHA violations with the California De-
and other events that place some extra bur- gency leave provisions have been effective partment of Fair Employment and Housing
den on the employee’s time or attention. since January 2009 and the military care- within one year of the violation. Again, there
Exigency is broken into eight categories: 1) giver provisions since January 2008. However, is no major case law that discusses service-
short-notice deployment, 2) military events there are currently no major federal cases on related disabilities under the ADAAA.
or related activities, 3) childcare and school either of these provisions. With service mem- Another act, the Vietnam Era Veterans
activities, 4) financial and legal arrange- bers returning at such a high rate, this will Readjustment Assistance Act (VEVRAA)
ments, 5) counseling, 6) rest and recupera- undoubtedly change, and case law will be applies to contractors and protects Vietnam-
tion, 7) post-deployment activities, and 8) developed as family members attempt to take era veterans, special disabled veterans, and
additional activities that arise out of active leave to care for their related service members veterans who served on active duty during a
duty or a call to duty status provided that the and veterans. war or in a campaign or expedition for which
employer and the employee agree the leave a campaign badge has been authorized for
qualifies as an exigency.43 The ADA, ADAAA, and VEVRAA participation in an armed conflict. The
For example, under exigency leave, a fam- On December 31, 2011, there were 3.38 mil- VEVRAA requires most federal contractors
ily member can take leave to provide urgent lion veterans receiving disability compensa- and subcontractors to take affirmative and
childcare or to make alternative childcare tion from the V.A.47 In January 2009, the deliberate steps to employ certain categories
arrangements for the child of a military mem- ADA Amendments Act of 2008 (ADAAA) of veterans and help them advance once
ber when required by the military member’s took effect, expanding the coverage of indi- employed.52 The VEVRAA also prohibits
active duty or call to active duty. The exigency viduals under the Americans with Disabilities discrimination against these veterans. The
leave only applies to family members of ser- Act (ADA). For example, a person must have act requires contractors and subcontractors
vice members in the National Guard or a physical or mental impairment that sub- to post all job openings, except for executive
Reserves and not the armed forces. As a com- stantially limits one or more major life activ- and top management jobs, with local and
parison, individuals who qualify for FMLA ities, among other requirements, to meet the state employment services. However, it does
leave but are ineligible for exigency or mili- ADA’s definition of disability. The ADAAA allow employers to forgo listing jobs that
tary caregiver leave can only take leave to expands the coverage of major life activities will last for three days or less or jobs that the
attend to their own or a family member’s to include not only activities like walking, contractor expects to fill internally. Under
serious health condition, or to care for a hearing, and seeing but also the operation of the VEVRAA, contractors must also give
newborn or newly adopted child or other major bodily functions, such as those of the covered veterans priority to job openings and
pregnancy-related condition. brain and neurological system.48 The ADAAA annually report on the number of covered vet-
Military caregiver leave under the FMLA also mandates that an impairment that “sub- erans they employ. The law also requires
allows qualifying employees to take up to stantially limits” does not have to “prevent contractors to establish hiring benchmarks for
26 weeks of leave to care for a covered mil- or severely or significantly restrict” perfor- veterans, annually review personnel prac-
itary member with a serious injury or ill- mance of a major life activity.49 For instance, tices, and comply with veteran outreach and
ness.44 Military caregiver leave can be taken episodic impairments or those in remission, recruitment requirements. Veterans who feel
by a spouse, child, parent, or next of kin of including Posttraumatic Stress Disorder their VEVRAA rights have been violated may
a covered service member who requires care. (PTSD), are disabilities if they are substantially file complaints with the Office of Federal
A covered service member is any member or limiting when active. In this way, it will be eas- Contract Compliance Programs or their local
veteran of the armed services, including the ier for service-related disabilities, including veteran’s employment representative.53
National Guard or Reserves. Under military PTSD, depression, partially or completely
caregiver leave, serious illness and injury is missing limbs, deafness, and blindness to be California Law and Veterans
defined as an illness or injury sustained by the considered disabilities under the ADA.50 California law provides its own protections
member in the line of duty while on active Consequently, the number of service mem- for service members under California Military
duty that makes the service member med- bers with qualifying disabilities is going to and Veterans Code Sections 394 and 395.54
ically unfit to perform duties of the service increase. Disabilities such as depression and The law requires that private employers pro-
member’s rank.45 PTSD are on the rise among veterans,51 and vide temporary, job-protected leave for up to
This year, the Department of Labor these types of “invisible” disabilities often 17 days a year for “military training, drills,
released proposed regulations to change appli- present challenges for employers who are encampment, naval cruises, special exercises
cation of the FMLA. The proposed changes not well trained in disability accommoda- or like activity.”55 Additionally, both private
would extend exigency leave to family mem- tion. As a result, employers will have to edu- and public employers cannot terminate
bers of armed forces service members and cate themselves on disabilities affecting ser- employees or make adverse employment deci-
not just the National Guard and Reserves. In vice members and ways to reasonably sions against service members for performing
addition, the proposed changes expand the accommodate those disabilities. their ordered military duties.56
maximum rest and recuperation exigency USERRA requires employers to provide California law also provides reemploy-
leave time for an employee from 5 to 15 reasonable accommodations to employees ment rights similar to those provided under
20 Los Angeles Lawyer November 2012You can also read
