If you're affected by a disaster such as a hurricane or flood, the last thing you want to have to worry about is meeting IRS tax filing and payment deadlines. Fortunately, the IRS understands this and is willing to help. IRS regulations provide that whenever there is a federally declared disaster, the IRS may postpone various tax filing deadlines for taxpayers in the affected area by as much as one year. This includes filing income tax returns and paying taxes due.
Such relief applies to:
- any individual whose principal residence is located in a covered disaster area
- any business entity or sole proprietor whose principal place of business is located in a covered disaster area
- taxpayers not in the covered disaster area, but whose records necessary to meet an IRS deadline are in such area
- any relief worker assisting in a covered disaster area
- the spouse of an affected taxpayer for purposes of filing a joint tax return, and
- any individual visiting the covered disaster area who was killed or injured as a result of the disaster.
A good example of the application of these rules is the relief the IRS is providing to individuals and businesses affected by Hurricane Isaac. Individuals and businesses located in the Isaac disaster area will have until January 11, 2013 to file their returns and pay any taxes due. The IRS will abate any interest, late-payment, or late-filing penalty that would otherwise apply. In addition, the IRS is waiving failure-to-deposit penalties for federal employment and excise tax deposits normally due during August 26 through September 10, if the deposits are made by September 10, 2012.
This relief applies to the following areas:
- in Louisiana: Ascension, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist and St. Tammany parishes
- in Mississippi: Hancock, Harrison, Jackson and Pearl counties.
If you live in one of these disaster areas and receive a penalty notice from the IRS, you should call the telephone number on the notice to have the IRS abate any interest and any late-filing or late-payment penalties that would otherwise be due. The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who live or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.
You can easily find out if an area has been declared a federal disaster area by visiting the Federal Emergency Management Agency (FEMA) website.