Federal Employees Fair Tax Act of 1987

Federal Employees Fair Tax Act of 1987 - Amends the Tax Reform Act of 1986 to repeal provisions which eliminated the three-year basis recovery rule in computing the amount of an employee's retirement benefits includable in gross income.

Provides that the Internal Revenue Code shall be applied and administered as if such provisions had not been enacted.

Repeals provisions which require the inclusion in income of certain distributions received before an annuity starting date.