I don't know, and I'm a Vet myself. You weren't clear when/why/where you got this notification, so I'll run a few situations that cover all bases. In the end...confirm who you're talking to by reaching out to them.
I don't mean to sound alarmist, only cautionary. I look out for my Service Members.
If this helped you, please up-vote this answer so I know you were taken care of 100%. If we need to work together further to get it resolved, please comment...we'll get it taken care of together.
I'm here to help.
For the tax year W-2 in question....if you have a code Q in box 12 on your actual paper W-2 form from DFAS, then it shouldn't be a problem, but you'll still need to respond to the IRS. (again, assuming the communication was really from the IRS).
And, we sometimes do have to recheck.....but the state tax authorities are not the "IRS" and shouldn't be referred to that way......just to make your situation clear if your letter was from the state.