September 2, 2020
The IRS has updated the disaster relief announcement for Iowa's August 10 derecho windstorm to include 11 counties. Counties added to the list are Benton, Boone, Cedar, Jasper, Marshall, Polk, Poweshiek, Scott, Story, and Tama Counties. Linn County was the only county included in the original notice. From the IRS announcement:
Individuals and households who reside or have a business in Benton, Boone, Cedar, Jasper, Linn, Marshall, Polk, Poweshiek, Scott, Story, and Tama counties qualify for tax relief, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.
The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after August 10, 2020, and before December 15, 2020, are postponed to December 15, 2020. This includes individual and business tax filers that had a valid extension to file their 2019 return due to run out on October 15, 2020. The IRS noted, however, that because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief.
The December 15 deadline applies to the third quarter estimated tax payment due on Sept. 15. It also applies to the quarterly payroll and excise tax returns normally due on November 2. In addition, it applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15.
In addition, penalties on payroll and excise tax deposits due on or after August 10 and before August 25 will be abated as long as the deposits are made by August 25, 2020.
It is possible that additional counties may be added.
Treasury Reg. Sec. 301.7508A-1(d)(1) shows that taxpayers who reside outside of these counties may qualify for relief. For example, affected taxpayers include:
-Any business entity or sole proprietor whose principal place of business is located in a covered disaster area;
-Any individual whose records necessary for filing are maintained in the covered disaster area;
-Any estate or trust that with tax records necessary to meet a deadline that are maintained in a covered disaster area
The notice says that taxpayers with the addresses in the area automatically qualify:
The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area should call the IRS disaster hotline at 866-562-5227 to request this tax relief.
Affected taxpayers with losses caused by the disaster have the option to claim them on either 2019 or 2020 filings.
Iowa doesn't honor the federal declarations for state deadline purposes and is not expected to provide any filing extensions as a result of the storm.
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.