The IRS has announced on its website that victims of the recent severe storms and flooding in counties in Massachusetts and Rhode Island are designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. Certain other time-sensitive acts also are postponed. The following is a summary of the relief that is available.
Who gets relief. Only taxpayers considered to be affected taxpayers are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. Affected taxpayers are those listed in Treas. Reg. § 301.7508A-1(d)(1) and thus include:
- any individual whose principal residence, and any business entity whose principal place of business, is located in the counties designated as disaster areas;
- any individual who is a relief worker assisting in a covered disaster area, regardless of whether he is affiliated with recognized government or philanthropic organizations;
- any individual whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area;
- any estate or trust that has tax records necessary to meet a filing or payment deadline in a covered disaster area; and
- any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife.
What may be postponed. Under Internal Revenue Code §7508A, the IRS gives affected taxpayers until the extended date (specified by county, below) to file most tax returns (including individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date falling on or after the onset date of the disaster (specified by county, below), and on or before the extended date.
The IRS also gives affected taxpayers until the extended date to perform other time-sensitive actions described in Treas. Reg. §301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 IRB 388, that are due to be performed on or after the onset date of the disaster, and on or before the extended date. This relief also includes the filing of Form 5500 series returns, in the way described in Rev. Proc. 2007-56, Sec. 8. Additionally, the relief described in Rev. Proc. 2007-56, Sec. 17, relating to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.
The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 or 5498 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 deposits, due on or after the onset date of the disaster, and on or before the deposit delayed date (specified by county, below), provided the taxpayer made these deposits by the deposit delayed date.
Affected areas and dates for storms, floods and other disasters as published on the IRS’s website:
Massachusetts: The following are federal disaster areas qualifying for individual assistance on account of severe storms and flooding beginning on March 12, 2010: Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester counties. For these Massachusetts counties, the onset date of the disaster was March 12, 2010, the extended date is May 11, 2010, and the deposit delayed date was March 29, 2010. [Note: In response to the IRS' tax deadline extension, the Massachusetts Department of Revenue has announced that the new filing deadline for state tax returns will be midnight May 11, 2010 for residents of the counties that were federally-declared disaster areas. (Release, Massachusetts Department of Revenue, 03/31/2010 ; Massachusetts Severe Storm and Flooding Victims Have Until May 11 to File Their Tax Returns, 03/31/2010).]
Rhode Island: The following are federal disaster areas qualifying for individual assistance on account of severe storms and flooding beginning on March 12, 2010: Kent, Newport, Providence and Washington counties. For these Rhode Island counties, the onset date of the disaster was Mar. 12, 2010, the extended date is May 11, 2010, and the deposit delayed date was Mar. 29, 2010.
For more information, please contact your CPA or our office.