Some disabled veterans will hear from the Defense Dept. about tax relief. A law requires DOD to identify veterans who received disability severance pay after 1990 from which taxes were improperly withheld, and to notify them of their rights. IRS and DOD are sending out letters this month to nearly 130,000 eligible veterans. Those who get a letter generally have one year from its date to file a claim for refund with IRS on Form 1040X. You can seek a refund based on the amount of actual benefits that you received or opt for standard refund amounts varying from $1,750 to $3,200, depending on the year you received the disability payment.