Tax Help Due to Hurricane Irma

Extensions and Removal of Penalties – Help for Hurricane Victims

This article is a little different than those we usually publish. But millions throughout the country were affected by this year’s Hurricanes Harvey and Irma. This time, the Internal Revenue Service took notice.

The IRS announced that it would provide an extension to victims of Hurricanes Irma and Harvey. People in certain areas will now have until Jan. 31, 2018, a three-to-four-month extension, to file personal and business tax returns. This extension also applies to many tax payments as well. This actually extends relief already granted for victims of Hurricane Harvey.

The IRS Commissioner acknowledged that the storms were devastating and that individuals and business affected by either storm needed a break from the traditional IRS deadlines. He also made clear that IRS expects to provide additional relief, at some point in the near future.

 Specifically, IRS has offered relief to those areas identified and designated by FEMA as assistance-qualifying. These areas primarily include much of Florida, Puerto Rico and the Virgin Islands. However,  cities, towns, and even entire counties in other states have since been added to the qualifying disaster area. Those additional areas now also qualify for and will receive the same filing relief. These specific areas may always be found on IRS’s disaster relief page here.

We would like to see a clear message that IRS collection enforcement (levies, tax liens) will be suspended for hurricane victims. We also expect that IRS will suspend audits of returns while so many affected people can rebuild their lives. We wait.

So What Relief is Already Offered?

Mostly now, however, relief is in the form of extensions for tax return filings and payments, and the removal of penalties. Here are a number of the items that have been established.

  •  Deadlines for tax filing and payment, occurring on Sept. 4, 2017 (in Florida) and Sept. 5, 2017 (Puerto Rico and the U.S. Virgin Islands) are postponed until Jan. 31, 2018;
  • Deadlines for individuals making the September quarterly estimated tax payments are postponed until Jan. 16, 2018. This is basically for those filing the Form 1040 tax returns for year 2016.
  • Deadlines were extended for quarterly payroll and excise tax returns, up to and including those subject to the October 31 deadline. The IRS disaster page specifies other business returns and actions for which more time will be granted.
  • Late-deposit penalties will be waived for payroll and excise tax deposits that were otherwise due during the first 15 days from that area’s “disaster period”. The applicable periods for each particular jurisdiction are listed on the IRS site.
  • The relief is available to any taxpayer with an IRS “address of record” (last reported to IRS) located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. The government also noted that, because some penalty notices for late filing or late payment will inevitably be sent to affected people, that person can simply call the number on the notice. The IRS will promptly remove the penalty.
  • IRS also recognized that some affected people live outside the disaster area. The federal government will cooperate with people whose records necessary to meet a storm-affected deadline were located in the affected area, if that deadline occurs during the postponement period. The same relief is available for workers and volunteers with a recognized government or charitable organization. Those people should call IRS at 866-562-5227, in order to request IRS leniency.
  • Another unique break was offered, available for both individuals and businesses, those who incurred losses from the hurricanes, whether those losses were uninsured or unreimbursed. Those losses may be claimed on either the current year’s (2017) return or the prior year’s (2016) tax return.

Tax Law Offices will keep you posted if there are significant changes or developments with federal tax relief related to hurricanes. If you are in need of a tax resolution lawyer to help you with your tax case, please contact us today. We look forward to helping residents in the Chicago area, including Naperville, Wheaton, Downer’s Grove, and more.