Executive summary:
IRS postpones tax filing and tax payment deadlines to July 31, 2023, for Tennessee storm victims. Affected taxpayers, however, must file extensions by April 18, 2023, if filed electronically.
IRS extends tax filing deadline for Tennessee storm victims
Filing and payment relief for affected taxpayers in certain Tennessee counties.
The IRS issued guidance granting relief to taxpayers affected by storms in Tennessee (TN) that occurred from March 31, to April 1, 2023. Individuals residing in and businesses with an address in Cannon, Hardeman, Hardin, Haywood, Lewis, Macon, McNairy, Rutherford, Tipton and Wayne counties qualify for relief. Affected individuals and business will have until July 31, 2023, to file returns and make tax payments originally due between March 31, 2023, and July 31, 2023.
The postponed deadline applies to individual returns and business returns due April 18, 2023. However, the IRS encourages affected taxpayers to file an extension electronically by April 18, 2023, if more time is needed to complete the tax return before the July 31, 2023, deadline. After April 18 and before July 31, 2023, affected taxpayers can only file their extension requests on paper.
The July 31 deadline also applies to quarterly estimated tax payments normally due on April 18 and June 15, 2023. These payments are postponed to July 31, 2023, for those taxpayers in the listed counties. Quarterly payroll and excise tax returns normally due normally due on April 30, 2023, are also postponed to July 31, 2023. Deadlines for certain information return filings, payroll tax deposits and excise tax deposits are not postponed, but penalties on payroll and excise tax deposits due on or after March 31, 2023, and before April 18, 2023, will be abated as long as the tax deposits are made by April 18, 2023. In addition, eligible taxpayers will also have until July 31, 2023, to make year 2022 contributions to their IRAs and health savings accounts.
The IRS relief includes other time-sensitive actions described in Reg. section 301.7508A-1(c)(1) and Rev. Proc. 2018-58; filing Form 5500 series returns due on or after the respective disaster start date and before July 31, 2023; and transferors who are not affected taxpayers but who are involved in a section 1031 like-kind exchange pursuant to section 17.02(2) of Rev. Proc. 2018-58.
Disaster-related casualty losses
In addition to extensions of time to file tax returns and complete certain actions, presidential disaster declarations offer taxpayers special options with respect to gain/loss recognition. Taxpayers who experience a casualty loss in a presidentially-declared disaster area may qualify to recognize losses in the year prior to the year the casualty actually occurred under section 165(i). Taxpayers who realize gains by receiving insurance proceeds in excess of basis may be able to defer gain recognition by reinvesting in qualified property under section 1033. Some of these actions are time sensitive, so taxpayers are encouraged to contact their tax advisor to take advantage of the full range of relief options. Taxpayers that will claim a disaster loss should note 'Disaster Designation – Tennessee, severe storms, straight-line winds and tornadoes' in bold letters at the top of their return and also include the FEMA disaster declaration number. For the March 31 storms in Tennessee, the designation is FEMA-4701-DR.
Please see the applicable news release and refer to Publication 547 and Instructions to Form 4684 Casualties and Thefts for instructions.
Automatic penalty relief
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. 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 or their representative should contact the IRS to have the penalty abated.
Relief for those impacted outside the disaster area
The IRS will also work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
