Wounded and disabled, this veteran is burdened by loan forgiveness taxes

Wounded and disabled, this veteran is burdened by loan forgiveness taxes
A wounded and disabled veteran had his student loans forgiven, only to be hit with a tax bill he can't pay. (Brendan Smialowski/AFP/Getty Images)

Will Milzarski put his life on the line for his country hundreds of times during his two tours in Afghanistan.

So when he got home, wounded and unable to work, the government forgave his student loans.

Then the IRS handed the Purple Heart recipient a huge tax bill that’s now threatening his livelihood.

‘The U.S. Army already took a lot of my blood’

Milzarski led troops on 244 combat missions, including 43 engagements with the enemy.

He was struck in the face with a ricocheted bullet which caused traumatic brain injury. Milzarski also suffers from post-traumatic stress disorder and hearing loss.

Because he is considered totally and permanently disabled, his more than $200,000 debt of student loans was forgiven.

One problem: Milzarski’s disabled status doesn’t exempt him from income taxes, and forgiven loans are considered income.

So between federal and state taxes, interest and penalties, he owes about $70,000 that he can’t pay.

He tried to work a state job when his military service ended. But he couldn’t maintain that employment because of struggles with concentration and memory.

“One part of government says, ‘We recognize your service, we recognize your inability to work,’ ” Milzarski said. “The other branch says, ‘Give us your blood.’ Well, the U.S. Army already took a lot of my blood.”

Home from war, another fight

Milzarski reached out to the Michigan State University’s low-income tax clinic for help, where Joshua Wease has taken up his case.

“If an individual has been deemed disabled and unable to pay their student loans, it seems incredible that they wouldn’t also be deemed unable to pay the taxes on the forgiveness of those same student loans,” Wease said.

Milzarski is facing the prospect of having his disability pay garnished and having a lien on his home. Desperate for assistance, he also reached out to members of Congress.

State senator Rick Jones is working on a bill to exempt wounded veterans from state taxes, but that won’t help Milzarski’s federal tax issues, and it also wouldn’t be retroactive.

Wease and the MSU tax clinic are still working with the IRS to find some kind of resolution. An offer for Milzarski to pay a lower amount was rejected by the IRS, and is now in an appeals process.

(H/T USA Today)

106 Comments