Tax Relief for Disaster Areas

Post Date: 8/31/11
Last Updated: 8/31/11

Summary

The President has declared several areas impacted by hurricane Irene as federal disaster areas. Declaration of an area to be a federal disaster area provides for government assistance for affected areas. Depending on circumstances, this may include assistance and tax relief from the IRS.

Tax relief. Victims in a federal disaster area may qualify for tax relief from the IRS. Individuals who live in the affected area, and businesses whose principal place of business is located in the covered disaster areas, can be granted extensions in filing required tax returns or to make tax payments, including estimated tax payments. In addition, the IRS may waive failure-to-deposit penalties that would otherwise apply. Individual taxpayers located in covered disaster areas who qualify for relief are automatically identified by the IRS. Taxpayers who live outside the affected area, or businesses located outside the covered disaster area must call the IRS at 1-866-562-5227 to request tax relief.

Casualty losses. Individual taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on the federal income tax return for either the previous year or the current year. Claiming the loss in the previous year requires the taxpayer to file an amended return or to claim it on the return for the previous year that has not yet been filed.
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