A bill to amend the Internal Revenue Code of 1986 to provide tax relief for military or civilian employees of the United States who are victims of terrorist attacks against the United States.

Amends Internal Revenue Code provisions concerning the death of a U.S. military or civilian employee resulting from a terrorist activity or military action to exempt such employee from income taxes if the activity or action occurred either inside or outside the United States. (Currently, the exemption from income taxes in such a situation is limited only to a death resulting from an activity or action which occurred outside the United States.)

Makes the additional estate tax inapplicable in the case of a U.S. military or civilian employee who died as a result of wounds incurred in a terrorist activity or military action which occurred either inside or outside the United States.