United States

IRS provides relief for victims of Hurricane Harvey

TAX ALERT  | 

On Aug. 28, 2017, the IRS issued IR-2017-135, directed towards taxpayers affected by Hurricane Harvey. According to IR-2017-135, Hurricane Harvey victims in parts of Texas have until Jan. 31, 2018 to file certain individual and business tax returns and make certain tax payments.

Currently, based upon information provided by FEMA, the counties eligible for relief are as follows: Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton.

Grant of relief

Pursuant to IR-2017-135, the tax relief postpones various tax filing and payment deadlines due on or after Aug. 23, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018 to file returns and pay any taxes that were originally due during this period, which includes the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, the relief also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

The IRS provides relief for the Oct. 31 deadline for filing of quarterly payroll and excise tax returns. The IRS is also waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after Aug. 23 and before Sept. 7, if the deposits are made by Sept. 7, 2017.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS provides relief to any taxpayer who lives outside the disaster area but whose records necessary to meet a filing deadline occurring during the postponement period are located in the affected area. This provision extends to those situations in which the taxpayers are not located in the disaster areas, but their accountants, in the possession of the work papers and tax documents, are. The IRS recommends that the affected taxpayers making the late submission state on the face of the return or the Form they are filing that although the filing is late, relief is available due to FEMA #4332 and IR 2017-135.

The relief is also available to workers assisting the relief activities who are affiliated with a recognized governmental or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or on the return for the prior year (2016). See Publication 547 for details.

Relief will also be extended to affected taxpayers in localities later designated by FEMA as a result of Hurricane Harvey.

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