Legislation passed by the Senate authorizes the IRS to postpone federal tax deadlines for taxpayers impacted by a qualified state declared disaster upon the state governor's written request. Additionally, the bill, which was passed on Jul. 11, increases for certain taxpayers the automatic extension of federal tax deadlines.
The House of Representatives earlier this year unanimously passed the bill called the Filing Relief for Natural Disasters Act (H.R. 517).
It was a welcome development for taxpayers and practitioners alike when the AICPA and various CPA state societies advocated for it. “The passage of this important legislation is a major win for taxpayers and tax practitioners across the country,” AICPA President & CEO Mark Koziel stated.
Koziel added that “when taxpayers are impacted by a disaster, the stress, anxiety and emotional toll can be overwhelming—these people should be afforded every opportunity to meet their tax obligations without additional hardship. We applaud the actions taken by members of Congress to set aside political ideology and unanimously support taxpayers by providing disaster victims’ timely relief. This bill will allow those impacted by a natural disaster to have certainty that tax filing deadlines will be extended earlier in the process, and sometimes before the disaster occurs, so they can focus on their safety.”
Under current law, the tax agency may delay federal tax deadlines for those impacted by a federally declared disaster such as, although not limited to, deadlines for filing and paying federal taxes, making retirement plan contributions, and tax assessments and collections.
The bill mandates the agency to delay such federal tax deadlines for taxpayers impacted by a qualified state declared disaster upon written request by the state’s governor or the District of Columbia mayor. Under the bill, a state covers the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.
It also defines qualified state declared disaster as any natural catastrophe, fire, flood, or explosion that causes damage of enough severity and magnitude to justify a request to postpone such federal tax deadlines.
Under current law, an automatic 60-day extension of such federal tax deadlines would apply to specific relief workers or individuals killed or injured due to a federally declared disaster, and taxpayers whose principal residence, business, or tax records are in a federally declared disaster area.
The bill boosts to 120 days the automatic extension of federal tax deadlines for these taxpayers.