Tax

IRS Issues Relief for Texas Storm Victims

December 2015
Author:  Brittany Cummings

Brittany Cummings

Senior Manager

Tax

Other

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Severe thunderstorms, flooding and tornadoes caused significant damage in Texas beginning October 22, 2015. The IRS has released guidance granting potential relief to individuals who reside or have a business in the affected Texas counties.

Affected Taxpayers

Those who live or work in the following Texas counties, declared federal disaster areas, could be eligible for relief:

Taxpayers are eligible for relief if their residence and/or principal place of business is in one of these counties. A taxpayer also may be granted relief if the records necessary to meet a filing or payment deadline are in one of the affected counties. Taxpayers who reside or have a business outside the covered disaster area but believe they are eligible for relief must call the IRS disaster hotline at 866.562.5227.

Extension of Filing & Payment Deadlines

The IRS has automatically granted filing relief (for most tax returns) and payment relief (including estimated payments) to taxpayers who reside in the aforementioned counties until February 29, 2016; taxpayers with filing or payment requirements originally due after October 22, 2015, have been postponed to February 29, 2016.  

The IRS also is waiving failure-to-deposit penalties for employment and excise tax deposits due on or after October 22, 2015, as long as the deposits were made by November 6, 2015.

Affected taxpayers receiving a penalty notice from the IRS should call the telephone number on the notice to request abatement for interest and late filing or late payment penalties that otherwise would apply. Penalties or interest only will be abated for taxpayers with an original or extended filing, payment or deposit due date within the postponement period.

Casualty Losses

Affected taxpayers have the option of claiming disaster-related casualty losses on their federal income tax return for this year or last year. Claiming the loss on an original or amended return for last year generally provides an earlier refund, but waiting to claim the loss on this year’s return could result in greater tax savings, depending on other income tax-related factors.

Those claiming the disaster loss on last year’s return should put the disaster designation “Texas Severe Storms, Tornadoes, Straight-line Winds and Flooding” at the top of the form so the IRS can expedite refund processing.

For more information on these relief provisions and how they could affect you, contact your BKD advisor.

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