IRS Expands Tax Relief to Victims of Recent Hurricanes

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Taxpayer victims of Hurricanes Irma and Maria have been granted special tax relief by the Internal Revenue Service.  Tax relief and assistance are now available to taxpayers in Florida, Georgia, U.S. Virgin Islands and Puerto Rico, however, tax relief can be felt by taxpayers and tax preparers nationwide – Nice!

Affected individuals and businesses will now have until Jan. 31, 2018 to file returns and pay any taxes originally due during the tax filing and payment deadlines that occurred starting on Sept. 4, 2017.

"A taxpayer does not have to be located in a federally declared disaster area to be an 'affected taxpayer.' Taxpayers are 'affected' if records necessary to meet a filing or payment deadline postponed during the relief period are located in a covered disaster area," the IRS says.

Any individual, business entity, sole proprietor or shareholder in an S Corporation can be considered an affected taxpayer. Disaster relief also applies to taxpayers outside of disaster areas if their tax preparer is located in a Federal Emergency Management Agency (FEMA) declared disaster area even when the taxpayer does not. What does this mean for those individuals in the accounting profession?

"Disaster relief applies to tax preparers who are unable to file returns or make payments on behalf of the client because of the disaster," the IRS says.

In order to benefit from the tax relief, you must call the Disaster Hotline at 866-562-5227, explain that your necessary records are located in a covered disaster area and provide the FEMA Disaster Number of the county in which your tax preparer is located. In other words, if your client's records are located in a FEMA declared disaster area, or you yourself reside in a FEMA declared disaster area, then you will not be held to the upcoming Oct. 15 tax deadline (don't forget to call the Disaster Hotline, though).

"This has been a devastating storm for the Southeastern part of the country, and the IRS will move quickly to provide tax relief for victims, just as we did following Hurricane Harvey," IRS Commissioner, John Koskinen, said. "The IRS will continue to closely monitor the storm's aftermath, and we anticipate providing additional relief for other affected areas in the near future."

Additionally, the postponed tax filing and payment deadlines also include the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, the postponement also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017.  However, there is something very important to keep in mind regarding 2016 tax return payments.

Because tax payments for 2016 returns were originally due on April 18, 2017, any 2016 payments will not be eligible for extended tax relief.

"A variety of business tax deadlines are also affected including the Oct. 31 deadline for quarterly payroll and excise tax returns," the IRS says. "Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2016 extensions run out on Nov. 15, 2017. The disaster relief page has details on the other returns, payments and tax-related actions qualifying for the additional time."

It is not uncommon for the IRS to reduce the tax liability of an individual or business entity after a catastrophic event.  In August, the IRS announced extended task relief in the wake of the aftermath of Hurricane Harvey.

"As always, check with your tax professional," CEO and Principal of the New Vision CPA Group, Jody Padar, said. "Casualty losses can have a significant impact [on] your tax returns and not just on filing deadlines."

For more information regarding tax relief guidelines, please visit www.IRS.gov. For more information on hurricane relief efforts, please visit www.fema.gov.

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