Gustav Tax Relief Help

Victims of Hurricane Gustav in Louisiana qualify for tax relief IR 2008-100

https://www.irs.gov/newsroom/article/0,,id=186409,00.html

An IRS news release says victims of Hurricane Gustav in the 34 parishes of Louisiana designated as presidential disaster areas have until Jan. 5, 2009, to make tax payments and file returns that would otherwise be due between Sept. 1, 2008, and Jan. 5, 2009. For example, the postponement applies to individual estimated tax payments and corporate extended Form 1120 returns due on Sept. 15, 2008, and individual extended Form 1040 returns due Oct. 15, 2008. Certain other time-sensitive acts also are postponed.

All disaster areas accumulated for 2008. This article updates and accumulates all the declared disaster areas for 2008. It summarizes the relief that’s available and includes up-to-date disaster area designations and extended filing and deposit dates for all counties and states affected by storms, floods and other disasters in 2008.

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, or whose tax professional/practitioner is located 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 counties and dates for storms, floods and other disasters in 2008 are as follows:

Arkansas: The following are presidential disaster areas qualifying for individual assistance: Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline and Van Buren counties. For these Arkansas counties, the onset date of the disaster was May 2, 2008, the extended date is July 21, 2008, and the deposit delayed date was May 19, 2008.

Colorado: The following are presidential disaster areas qualifying for individual assistance: Larimer and Weld counties. For these Colorado counties, the onset date of the disaster was May 22, 2008, the extended date is July 25, 2008, and the deposit delayed date was June 6, 2008.

Florida: The following are presidential disaster areas qualifying for individual assistance on account of Tropical Storm Fay: Brevard, Duval, Hendry, Lee, Leon, Okeechobee, Seminole, St. Lucie, Volusia and Wakulla counties. For these Florida counties, the onset date of the disaster was Aug. 18, 2008, the extended date is Nov. 17, 2008, and the deposit delayed date was Sept. 2, 2008.

Georgia: The following are presidential disaster areas qualifying for individual assistance: Bibb, Carroll, Douglas, Emanuel, Jefferson, Jenkins, Johnson, Laurens, McIntosh and Twiggs counties. For these Georgia counties, the onset date of the disaster was May 11, 2008, the extended date is July 22, 2008, and the deposit delayed date was May 27, 2008.

Illinois: The following are presidential disaster areas qualifying for individual assistance: Adams, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Lake, Lawrence, Mercer and Winnebago counties. For these Illinois counties, the onset date of the May disaster was June 1, 2008, the extended date was Aug. 25, 2008, and the deposit delayed date was June 16, 2008.

Indiana: The following are presidential disaster areas qualifying for individual assistance on account of severe storms and tornadoes beginning on May 30: Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington and Wayne counties. For these Indiana counties, the onset date of the May disaster was May 30, 2008, the extended date was Aug. 7, 2008, and the deposit delayed date was June 16, 2008.

The following are presidential disaster areas qualifying for individual assistance on account of severe storms and tornadoes on January 7: Allen, Benton, Carroll, Cass, DeKalb, Elkhart, Fulton, Huntington, Jasper, Kosciusko, Lake, Laporte, Marshall, Newton, Noble, Pulaski, St. Joseph, Starke, Tippecanoe, White and Whitley counties.

For the Indiana counties declared to be disaster areas on account of the January storms and tornadoes, the onset date of the disaster was January 7, 2008, the extended date was March 31, 2008, and the deposit delayed date was January 22, 2008.

Iowa: The following are presidential disaster areas qualifying for individual assistance: Adams, Allamakee, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler, Cedar, Cerro Gordo, Chicksaw, Clayton, Crawford, Delaware, Des Moines, Fayette, Floyd, Franklin, Freemont, Hamilton, Hancock, Hardin, Harrison, Jasper, Johnson, Jones, Kossuth, Lee, Linn, Louisa, Madison, Mahaska, Marion, Marshall, Mills, Monona, Muscatine, Page, Polk, Scott, Story, Tama, Union, Wapello, Warren, Webster, Winneshiek and Wright counties. For these Iowa counties, the onset date of the disaster is May 25, 2008, the extended date was July 28, 2008, and the deposit delayed date was June 9, 2008.

Louisiana: The following are presidential disaster areas qualifying for individual assistance on account of Hurricane Gustav: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Rapides, Sabine, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, Terrebonne, Vermilion, Vernon, West Baton Rouge and West Feliciana parishes. For these Louisiana parishes, the onset date of the disaster is Sept. 1, 2008, the extended date is Jan. 5, 2009, and the deposit delayed date is Sept. 16, 2008.

Maine: The following are presidential disaster areas qualifying for individual assistance: Aroostook and Penobscot counties. For these Maine counties, the onset date of the disaster was April 28, the extended date was July 8, and the deposit delayed date was May 13, 2008.

Missouri: The following are presidential disaster areas qualifying for individual assistance on account of the June storms and flooding: Clark, Lewis, Lincoln, Marion, Pike, Ralls and St. Charlies counties. For these Missouri counties, the onset date of the disaster was June 1, 2008, the extended date was August 29, 2008, and the deposit delayed date was June 16, 2008.

The following are presidential disaster areas qualifying for individual assistance on account of the May storms and tornados: Barry, Jasper and Newton counties. For these Missouri counties, the onset date of the disaster was May 10, 2008, the extended date was July 22, 2008, and the deposit delayed date was May 27, 2008.

Mississippi: The following are presidential disaster areas qualifying for individual assistance: Bolivar, Warren, Washington and Wilkinson counties. For these Mississippi counties, the onset date of the disaster was March 20, 2008, the extended date was July 7, 2008, and the deposit delayed date was April 4, 2008.

Nebraska: The following are presidential disaster areas qualifying for individual assistance: Buffalo, Butler, Colfax, Dawson, Douglas, Gage, Hamilton, Jefferson, Kearney, Platte, Richardson, Sarpy and Saunders counties. For these Nebraska counties, the onset date of the disaster was May 22, 2008, the extended date was Aug. 19, 2008, and the deposit delayed date was June 6, 2008.

Oklahoma: The following are presidential disaster areas qualifying for individual assistance: Craig, Latimer, Ottawa and Pittsburg counties. For these Oklahoma counties, the onset date of the disaster was May 10, 2008, the extended date was July 14, 2008, and the deposit delayed date was May 27, 2008.

Texas: The following are presidential disaster areas qualifying for individual assistance on account of Hurricane Dolly: Cameron, Hildalgo and Willacy counties. For these Texas counties, the onset date of the disaster was July 22, 2008, the extended date was Sept. 22, 2008, and the deposit delayed date was Aug. 6, 2008.

West Virginia: The following are presidential disaster areas qualifying for individual assistance: Barbour, Doddridge, Gilmer, Harrison, Jackson, Jefferson, Marion, Taylor, Tucker, Tyler and Wetzel counties. For these West Virginia counties, the onset date of the disaster was June 3, 2008, the extended date was Aug. 18, 2008, and the deposit delayed date was June 23, 2008.

Wisconsin: The following are presidential disaster areas qualifying for individual assistance: Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha and Winnebago counties. For these Wisconsin counties, the onset date of the disaster was June 5, 2008, the extended date was Aug. 18, 2008, and the deposit delayed date was June 5, 2008.

Claiming disaster loss on previous year’s return. A taxpayer that sustains a loss attributable to a disaster occurring in a Presidential disaster area may elect to deduct that loss on his return for the tax year immediately preceding the tax year in which the disaster occurred. (Code Sec. 165(i)) Generally, a taxpayer must make this election by filing a return, an amended return, or a refund claim on or before the later of (i) the due date of his income tax return (determined without regard to any filing extension) for the tax year in which the disaster actually occurred, or (ii) the due date of his tax return (determined with regard to any filing extension) for the immediately preceding tax year. The election is irrevocable 90 days after it is made. (Reg. § 1.165-11(e)) Thus, taxpayers in affected counties designated as disaster areas in 2008 can elect to claim a 2008 disaster loss on their 2007 returns, instead of on their 2008 returns.

Observation: Claiming the disaster loss for the year before the loss occurred saves taxes immediately, without having to wait until the end of the year in which the loss was sustained. In some cases, the deduction may result in a net operating loss, which could result in a refund from an earlier year to which it is carried. On the other hand, deducting the loss in the year the loss actually occurred may result in bigger tax savings if the taxpayer is in a higher bracket in that year.