IRS Announces Disaster Relief for Hurricane Victims

By James Beavers, J.D., LL.M., CPA

The IRS has announced tax relief under Sec. 7508A for Louisiana and Texas taxpayers who were affected by Hurricanes Gustav and Ike. The relief applies to taxpayers who live in or have a principal place of business in Texas counties or Louisiana parishes that were declared presidential disaster areas as a result of the storms (IR-2008-100, IR-2008-107, IR-2008-108).

For Hurricane Gustav victims, the relief applies to return filing, tax payment, and other time-sensitive acts otherwise due between September 1, 2008, and January 5, 2009. For victims of Hurricane Ike, the relief applies to acts due on or after September 7 (for affected Texas taxpayers) or September 11 (for affected Louisiana taxpayers) and before January 5, 2009. This includes individual estimated tax returns and corporate tax returns due on September 15, 2008, and extended individual returns due on October 15, 2008.

The relief includes an extension of time until January 5, 2009, for affected taxpayers to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership and S corporation 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 an extended due date occurring on or after the dates specified above for the particular hurricane and location and before January 5, 2009. The relief also includes an extension of time to perform certain time-sensitive acts described in Rev. Proc. 2007-56.

Affected taxpayers who receive a penalty notice from the IRS should call the telephone number on the notice to have the Service abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing or payment due date between September 1, 2008, and January 5, 2009.

While the primary beneficiaries of the tax relief are taxpayers who live and have businesses in the disaster areas, relief is also available to taxpayers not in the covered disaster areas but whose books, records, or tax professionals' offices are in the covered disaster areas. All relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster areas are also covered.

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