IRS provides guidance for taxpayers affected by Hurricane Matthew
TAX ALERT |
On Oct. 13, 2016, the IRS issued News Release IR-2016-132 (IR-2016-132), directed towards taxpayers affected by Hurricane Matthew. The release is followed by IRS News Release IR-2016-131 , issued on Oct. 11, 2016, that designated specific counties in North Carolina affected by Hurricane Matthew, whose residents will have until March 15, 2017, to file their tax returns, otherwise due on Oct. 17, 2016. As of Oct. 14, 2016, designated counties in North Carolina include Dare, Duplin, Gales, Hyde, Jones, Pender, Green, Harnett, Sampson, Bertie, Johnston, Wayne and Wilson.
IR-2016-132 noted that additional individual assistance areas could be added to the federal disaster area in coming days based upon continuing damage assessments by the Federal Emergency Management Agency (FEMA). These additional disaster declarations will allow for extensions of time to file returns to taxpayers impacted by Hurricane Matthew who are located in other states. Based on the FEMA information, the affected states include Florida, Georgia, North Carolina and South Carolina.
According to IR-2016-132, taxpayers affected by Hurricane Matthew, but not yet covered by a federal disaster declaration with individual assistance, may qualify for relief from penalties if they are unable to meet the Oct. 17 extended deadline for filing 2015 tax returns. As noted earlier, in areas with disaster declarations for individual assistance, taxpayers will have until March 15, 2017, to file returns otherwise due Oct. 17, 2016.
Taxpayers living outside of the federally-declared disaster area may receive a penalty notice from the IRS for late filing. If this happens, those taxpayers can request abatement of the penalties, based upon reasonable cause, by replying in writing to the penalty notice and explaining that they were impacted by the hurricane.