The IRS is much maligned, especially during tax time, when taxpayers are scrambling to get tax documents together, business owners are tallying up expenses and gathering receipts from the year, and accountants are trying to decipher all the tax code changes that occurred in the past 12 months. But the IRS isn’t all bad. Sometimes good things come from this organization.
It’s a rare person who wasn’t moved by the images of the wildfires that devastated Maui, Hawaii, last week. News reports painted a grim picture as firefighters worked to extinguish the flames and relief workers attempted to find people trapped in the debris before it was too late to save them. Despite these efforts, more than 114 people have died in the flames, with the potential for more to be added to the toll as rescue workers locate missing people during their cleanup efforts.
FEMA Steps In
The citizens of Maui have been through a lot, and many organizations here on the mainland are coming up with ways to help. The government is one such entity. Most people aren’t aware that when disasters like this occur, the federal government can grant tax relief to those most impacted. On August 18, the IRS announced that it would provide tax relief to victims of the wildfires in Hawaii.
Publication 547 of the IRS code allows for tax relief for business owners and individuals impacted by a casualty. In this case, a casualty is defined as “the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.” The wildfires in Maui certainly qualify. The area has been declared a federal disaster area by the Federal Emergency Management Agency (FEMA), and this disaster designation qualifies impacted households and businesses for certain types of relief from tax filing and payment deadlines.
For the citizens of Maui, returning to their regular daily routines is out of the question — at least for the foreseeable future. Many are without homes or employment. Many other more pressing survival needs take precedence over getting taxes filed on time. The IRS declaration gives these residents time to pick up the pieces and sort out their lives before worrying about getting hit with penalties for filing a tax return late.
Here’s What Help Looks Like
Taxpayers who owe filings and payments due on October 16, 2023, now have until February 15, 2024, to get those documents and payments into the IRS. The extension applies to the following scenarios:
- Quarterly estimated income tax payments typically due September 15, 2023, and January 16, 2024
- Quarterly payroll and sales tax returns due October 31, 2023, and January 31, 2024
- Calendar-year business partnerships and S corporations whose 2022 extensions run out on September 15, 2023
- Calendar-year corporations whose 2022 extensions run out on October 16, 2023
- Calendar-year tax-exempt organizations whose extensions run out on November 15, 2023
In addition, certain other penalties may also be reduced.
Taxpayers in the affected area don’t have to do anything to qualify for or receive this tax relief except have an address in the FEMA-designated disaster area.
Call Adams Accounting Solutions for Tax Relief Questions
Adams Accounting Solutions handles tax returns for clients throughout the country. It’s our job to stay on top of situations such as this one and advise impacted customers on how to proceed tax-wise.
If you have questions about how a natural disaster might impact your tax situation, give us a call. You can also call with any other tax-related questions. We’re here to make the tax preparation process easier and less stressful for you. And if disaster strikes, we’ll be here then too.
