The IRS has granted tax relief measures to certain victims of severe storms that took place in Alabama beginning on April 28, 2014. The tax relief may extend to those impacted by tornadoes, floods, or straight-line winds related to those severe storms.
Disaster Tax Relief Benefits Granted by IRS
The tax relief benefits include the postponement of tax deadlines that fall between April 28, 2014 and October 15, 2014. The IRS has delayed all tax deadlines that fall between those dates until October 15, 2014. The postponed dates include the annual May 15 filing date for tax-exempt organizations to complete Form 990, the June 16 and September 15 deadlines to make quarterly estimated tax payments, and the April 30 and July 31 deadlines to complete quarterly payroll and excise tax returns.
In addition, the postponement includes the filing of other tax returns due between April 28, 2014, and October 15, 2014. Taxpayers may delay filing of all such tax returns until October 15, 2014. These tax returns include but may not be limited to corporate, estate, individual, and trust income tax returns; partnership, S corporation, and trust tax returns; estate, generation-skipping transfer, and gift tax returns; and employment and excise tax returns.
The IRS has also waived the failure-to-deposit penalties related to employment and excise tax payments due between April 28 and May 13, so long as the businesses remit those deposits by May 13, 2014.
Any taxpayer suffering an actual loss stemming from the disaster may claim those losses as a casualty loss on their 2013 or 2014 state and federal income tax return. Taxpayers may choose whether to include the casualty loss in their 2013 or 2014 tax return, depending on which scenario gives the taxpayer the better tax benefit.
Recipients of Tax Relief Benefits
The current disaster relief areas include Baldwin, Jefferson, Lee, and Limestone counties. The IRS based the tax relief areas on areas that the Federal Emergency Management Agency (FEMA) declared as disasters. The IRS may extend the tax relief benefits to additional areas in the event FEMA declares other areas as disasters once they complete further damage assessments.
The recipients of these tax relief benefits include the following:
- Individuals who live in the noted disaster areas
- Businesses whose principal place of business is located in the noted disaster areas
- Individuals or businesses located outside of the identified disaster areas but who rely on documents located in the noted disaster areas to prepare filings to meet tax deadlines
- Relief workers for government or not-for-profit entities providing relief services in the noted disaster areas
- Individual who live outside the noted disaster areas but who were visiting the disaster area at the time of the severe storms and was injured or killed by those storms
The IRS automatically identifies individuals and businesses in the designated disaster areas and grants them the tax relief benefits. In the event an individual or business outside of the designated area believes they should receive the noted tax relief benefits, the individual should call the IRS at 1-866-562-5227.
In addition, if a taxpayer receives a notice from the IRS of a penalty that the taxpayer believes the IRS should waive under this tax relief benefit, the taxpayer should call the IRS at the phone number included on the notice.
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Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.