The IRS is offering taxpayer relief to victims of recent bad weather in three states.
Victims of the severe storms and flooding that took place beginning in early March in parts of Louisiana may qualify. Individuals who reside or have a business in Bossier, Claiborne, Grant, Morehouse, Ouachita, Richland, and Webster Parishes may qualify for tax relief. Updates also included those who live in Jackson, Rapides, Red River and Sabine Parishes, as well as those who live or have a business in Allen, Ascension Calcasieu, Beauregard, Bienville, Caddo, Caldwell, De Soto, La Salle, Livingston, Madison, Natchitoches, St. Tammany, Tangipahoa, Union, Vernon, Washington, West Carroll and Winn Parishes.
In addition, similar relief is available for victims of the early-March severe storms and flooding in parts of Mississippi, including individuals who reside or have a business in Bolivar, Coahoma, Washington, Clarke, Forrest, Greene, Jones, Marion, Panola, Perry, Quitman, Sunflower, Tunica and Wayne Counties.
Victims of the severe storms tornadoes and flooding that took place beginning on March 7 in parts of Texas may qualify for tax relief, as well, including individuals who reside or have a business in Jasper, Newton, Orange, Erath, Gregg, Harrison, Hood, Marion and Parker Counties.
Following the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS can postpone certain deadlines for taxpayers who reside or have a business in disaster areas. For instance, certain deadlines falling on or after March 8 and on or before July 15 have been postponed to July 15, 2016. This includes 2015 income tax returns normally due on April 18.
It also includes the April 18 and June 15 deadlines for making quarterly estimated tax payments. A variety of business tax deadlines are also affected including the May 2 deadlines for quarterly payroll and excise tax returns.
In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after March 8, as long as the deposits were made by March 23, 2016.
If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at (866) 562-5227 to request this tax relief.
The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after March 8 and on or before March 23 provided the taxpayer made these deposits by March 23.
Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either the year in which the event occurred, or the prior year. Individuals may also deduct personal property losses that are not covered by insurance or other reimbursements.
Affected taxpayers claiming the disaster loss on a 2015 return should put their state name and “Severe Storms, and Flooding” at the top of the form.
Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.