Businesses and individuals affected by the Texas wildfires are being given a break by the nation’s largest tax agency. The Internal Revenue Service is deferring some tax reporting deadlines for residents of certain fire-ravaged sections of Texas that have been declared federal disaster areas by President Obama. This may come as good news for some who were concerned about their tax compliance.
Portions of Texas hill country and Bastrop County are qualified for official IRS tax relief due to the president’s order. The Texas Society of CPAs reports the federal tax agency is postponing certain filings for individuals and businesses in the fire zones until the end of October.
The tax returns affected are ones that were due on and between Aug. 30, 2011 and Oct. 31, 2011. For qualifying taxpayers, those tax returns are now due by the last day of October.
The tax relief measure for Texas wildfire disaster areas also applies to taxpayers who already secured IRS filing extensions for 2010 returns. Those filers, who had already been given permission to file either by Sept. 15 or Oct.17, are being granted more time to file. Some excise and employment tax penalties for failure-to-deposit are also being waived for disaster victims.
According to the state CPA group, the Internal Revenue Service is proactively identifying the affected taxpayers in designated disaster areas. The extensions to file are automatically applied. Individuals and companies outside the federally declared disaster zones who were adversely affected by the wildfires can call the IRS to ask for tax relief.
Beyond the shifting of the deadlines, wildfire-affected taxpayers may also be able to claim losses due to the disaster. The TSCPA says taxpayers may choose to amend already filed 2010 tax returns to reflect the losses or wait until 2011 taxes are due to make loss claims.
Source: accountingtoday.com, “IRS Provides Tax Relief for Texas Wildfire Victims,” Michael Cohn, Sept. 12, 2011