Wednesday, June 15, 2011

More Disaster Victims In Kentucky Qualify For Tax Relief

IRS has announced on its website that additional victims of the severe storms, tornadoes and flooding beginning April 22, 2011 in counties of Kentucky that are designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. Certain other time-sensitive acts also are postponed. This article summarizes the relief that's available and includes up-to-date disaster area designations and extended filing and deposit dates for all areas affected by storms, floods and other disasters in 2011.

Who gets relief. Only taxpayers considered to be affected taxpayers are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. Affected taxpayers are those listed in Reg. §301.7508A-1(d)(1) and thus include:

... any individual whose principal residence, and any business entity whose principal place of business, is located in the counties designated as disaster areas;

... any individual who is a relief worker assisting in a covered disaster area, regardless of whether he is affiliated with recognized government or philanthropic organizations;

... any individual whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area;

... any estate or trust that has tax records necessary to meet a filing or payment deadline in a covered disaster area; and

... any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife.

What may be postponed. Under Code Sec. 7508A, IRS gives affected taxpayers until the extended date (specified by county, below) to file most tax returns (including individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date falling on or after the onset date of the disaster (specified by county, below), and on or before the extended date.

IRS also gives affected taxpayers until the extended date to perform other time-sensitive actions described in Reg. §301.7508A-1(c)(1) and Rev Proc 2007-56, 2007-34 IRB 388, that are due to be performed on or after the onset date of the disaster, and on or before the extended date. This relief also includes the filing of Form 5500 series returns, in the way described in Rev Proc 2007-56, Sec. 8. Additionally, the relief described in Rev Proc 2007-56, Sec. 17, relating to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 or 5498 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. IRS, however, will abate penalties for failure to make timely employment and excise deposits, due on or after the onset date of the disaster, and on or before the deposit delayed date (specified by county, below), provided the taxpayer made these deposits by the deposit delayed date.

Affected areas and dates for storms, floods and other disasters in 2011 that are federal disaster areas qualifying for individual assistance, as published on IRS's website, are carried below.

Observation: Effective for disasters declared in tax years beginning after Dec. 31, 2007, the term “federally declared disaster” replaced the previously used “presidential disaster area” term (see Code Sec. 1033(h)(3), as amended by Sec. 706(d)(1), Div. C, P.L. 110-343). The new term is substantially the same as the definition of “presidentially declared disaster” under former law. (T.D. 9443, 01/4/2009)

Alabama: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds, and flooding on April 15, 2011: Autauga, Bibb, Blount, Calhoun, Chambers, Cherokee, Chilton, Choctaw, Clarke, Colbert, Coosa, Cullman, DeKalb, Elmore, Escambia, Etowah, Fayette, Franklin, Greene, Hale, Jackson, Jefferson, Lamar, Lauderdale, Lawrence, Limestone, Madison, Marengo, Marion, Marshall, Monroe, Morgan, Perry, Pickens, Shelby, St. Clair, Sumter, Talladega,Tallapoosa, Tuscaloosa, Walker, Washington, and Winston counties.

For these Alabama counties, the onset date of the disaster was Apr. 15, 2011, the extended date is June 30, 2011 (which includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an individual retirement account (IRA)). The deposit delayed date was May 2, 2011.

Arkansas: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes and associated flooding beginning on April 23, 2011: Arkansas, Benton, Boone, Clay, Crittenden, Cross, Faulkner, Garland, Greene, Independence, Jackson, Jefferson, Lawrence, Lee, Lincoln, Lonoke, Madison, Mississippi, Monroe Montgomery, Phillips, Poinsett, Prairie, Pulaski, Randolph, St. Francis, Saline, Washington, White and Woodruff counties.

For these Arkansas counties, the onset date of the disaster was Apr. 23, 2011, the extended date is June 30, 2011. The deposit delayed date was May 9, 2011.

Georgia: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds and associated flooding on April 27, 2011: Bartow, Catoosa, Cherokee, Coweta, Dade, Floyd, Gordon, Greene, Harris, Habersham, Heard, Lamar, Lumpkin, Meriwether, Monroe, Morgan, Newton, Pickens, Polk, Rabun, Spalding, Troup, Upson, Walker and White counties.

For these Georgia counties, the onset date of the disaster was Apr. 27, 2011, the extended date is June 30, 2011. The deposit delayed date was May 12, 2011.

Illinois: The following are federal disaster areas qualifying for individual assistance on account of severe storms and flooding beginning on April 19, 2011: Alexander, Franklin, Gallatin, Hardin, Jackson, Lawrence, Massac, Perry, Pope, Pulaski, Randolph, Saline, White and Williamson counties.

For these Illinois counties, the onset date of the disaster was Apr. 19, 2011, the extended date is June 30, 2011 (which includes the estimated tax payment for the second quarter of 2011 normally due June 15). The deposit delayed date was May 4, 2011.

Kentucky: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes and flooding beginning on April 22, 2011: Ballard, Boyd, Carlisle, Carroll, Crittenden, Daviess, Fulton, Graves, Hardin, Henderson, Hickman, Jefferson, Johnson, Lawrence, Livingston, Marshall, McCracken, McLean, Pike, Union and Webster counties.

For these Kentucky counties, the onset date of the disaster was Apr. 22, 2011, the extended date is June 30, 2011. The deposit delayed date was May 9, 2011.

Mississippi: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds, and associated flooding beginning on April 15, 2011: Alcorn, Attala, Chickasaw, Choctaw, Clarke, Clay, Coahoma, DeSoto,Greene, Grenada, Hinds, Holmes, Jasper, Kemper, Lafayette, Leflore, Marshall, Monroe, Montgomery, Neshoba, Newton, Panola, Quitman, Smith, Sunflower, Tishomingo, Tunica, Webster and, Winston counties.

For these Mississippi counties, the onset date of the disaster was April 15, 2011, the extended date is June 30, 2011 (which includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an IRA). The deposit delayed date was May 2, 2011.

Mississippi: The following are federal disaster areas qualifying for individual assistance on account of flooding beginning on May 3, 2011: Adams, Bolivar, Claiborne, Coahoma, DeSoto, Humphreys, Issaquena, Jefferson, Sharkey, Tunica, Warren, Washington, Wilkinson, and Yazoo counties.

For these Mississippi counties, the onset date of the disaster was May 3, 2011, the extended date is July 5, 2011. The deposit delayed date was May 18, 2011.

Missouri: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds and flooding beginning on April 19, 2011: Bollinger, Butler, Cape Girardeau, Dunklin, Howell, Jasper, McDonald, Mississippi, New Madrid, Newton, Pemiscot, Phelps, Pulaski, Reynolds, Ripley, Scott, Stoddard, Stone, St. Francois, St. Louis and Taney counties.

For these Missouri counties, the onset date of the disaster was April 19, 2011, the extended date is June 30, 2011. The deposit delayed date was May 4, 2011. However, the dates for Jasper have been changed, as discussed below.

The following is a federal disaster area qualifying for individual assistance on account of the devastating tornado on May 22, 2011: Jasper county.

For this Missouri county, the onset date of the disaster was May 22, 2011, the extended date is Aug. 1, 2011. The deposit delayed date is June 6, 2011. This relief also applies to Jasper County victims of the storms and flooding that began April 19. For any affected taxpayer, a filing or payment deadline falling on or after April 19 and before Aug. 1 is postponed until Aug. 1, 2011, including the June 15 deadline for making the estimated tax payment for the second quarter of 2011.

North Carolina: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes and flooding on April 16, 2011: Bertie, Bladen, Craven, Cumberland, Currituck, Greene, Halifax, Harnett, Hertford, Hoke, Johnston, Lee, Onslow, Pitt, Robeson, Sampson, Tyrell, Wake and Wilson counties.

For these North Carolina counties, the onset date of the disaster was April 16, 2011, the extended date is June 30, 2011 (which includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an IRA). The deposit delayed date was May 2, 2011.

Oklahoma: The following are the federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds, and flooding beginning on May 22, 2011: Canadian, Delaware, Grady, Kingfisher, Logan, and McClain counties.

For these Oklahoma counties, the onset date of the disaster was May 22, 2011, the extended date is August 1, 2011 (which includes the estimated tax payment for the second quarter of 2011 normally due June 15). The deposit delayed date is June 15, 2011.

Oklahoma: The following is the federal disaster area qualifying for individual assistance on account of severe storms, tornadoes and straight-line winds on April 14, 2011: Atoka county.

For this Oklahoma county, the onset date of the disaster was April 14, 2011, the extended date is June 30, 2011 (which includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an IRA). The deposit delayed date was April 29, 2011.

Tennessee: The following are the federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds and flooding beginning on April 19, 2011: Dyer, Gibson, Lake, Lauderdale, Lincoln, Obion, Shelby, Stewart, and Tipton counties.

For these Tennessee counties, the onset date of the disaster was April 19, 2011, the extended date is June 30, 2011. The deposit delayed date was May 4, 2011.

Tennessee: The following are the federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds and associated flooding beginning on April 25, 2011: Bledsoe, Bradley, Carroll, Cocke, Crockett, Greene, Hamilton, Hardin, Henry, Johnson, Knox, McMinn, Madison, Monroe, Montgomery, Rhea and Washington counties.

For these Tennessee counties, the onset date of the disaster was April 25, 2011, the extended date is June 30, 2011. The deposit delayed date was May 10, 2011.

References: For postponement of tax deadlines due to disasters, see FTC 2d/FIN ¶S-8500; United States Tax Reporter ¶75,08A4; TaxDesk ¶570,306; TG ¶1944.

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