Getting Started on the Road to Recovery and - Spring Flooding Tax Filing Deadlines - Schreiber & Schreiber - nescpa
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Schreiber & Schreiber
Certified Public Accountants
Getting Started on the Road to Recovery
and
Spring Flooding Tax Filing Deadlines
Nebraska CPA Society
April 11, 2019
© 2019 Gerard H. Schreiber, Jr., CPA
1
Jerry Schreiber
• Partner with Schreiber & Schreiber
• Author, “Documenting a Casualty Loss”,
Journal of Accountancy, November 2008
http://www.journalofaccountancy.com/Issues/2008/Nov/Documenting+a
+Casualty+Loss.htm
• Presentations include Hurricanes Katrina, Rita, Wilma, Gustav, Ike,
Isaac, Irene, Sandy, Matthew, Harvey, Maria, Irma, Florence, and
Michael, 2010 Nashville TN flooding, 2012 Colorado Springs Fires, 2014
Oklahoma Tornadoes, South Carolina 2015 Flooding, Spring 2016
Louisiana Flooding, August 2016 Louisiana Flooding
• Member, AICPA IRS Advocacy and Relations Committee
• Author, "An Overview of AICPA and IRS Rules of Practice”, The Tax
Adviser, February 2014
• Author, “Tax Practice Quality Control”, The Tax Adviser, November 2012
• Author, "Circular 230 Best Practices”, The Tax Adviser, April 2010
• Author, “Strengthening Tax Services' Foundation”, Journal of
Accountancy, May 2009
• Contact at: ghschreiber@bellsouth.net Phone 504-832-1819
2
Today’s Topics
• General Overview and Resources
• IRS Filing Dates
• IRS Examples
3
E Mail Future Questions to:
ghschreiber@bellsouth.net
4
5
6
7
8
The Most Important Thing About
A Disaster:
Your Comfort Zone Disappears
9
Resources
• AICPA Casualty Loss Guide
• IRS FAQ’s Disaster Victims http://www.irs.gov/Businesses/Small‐
Businesses‐&‐Self‐Employed/FAQs‐for‐Disaster‐Victims
• CPA Disaster Yahoo Group
http://finance.groups.yahoo.com/group/CPA_Disaster/
• Local Network Groups
• DisasterAssistance.gov
• FEMA
• Social Media
• Insurance Company List
http://www.iii.org/articles/insurance‐company‐claims‐
filing‐telephone‐numbers.html
• United Policyholders www.uphelp.org
1011
12
13
14
15
16
17
http://www.iii.org/articles/insurance-company-claims-filing-telephone-
numbers.html
Here is a list of claim contact numbers:
A
AAA Insurance (Auto Club Family Insurance Company) 800-222-7623 ext. 5000
Acadia Insurance Company 800-444-0049, ext. 2600
ACE Private Risk Services 800-945-7461
ACE USA Clients receive individual 800 numbers or call 800 945-7461 (ACE USA/ACE Recreational Marine
claims); 800 234-7354 (Disaster Mortgage Protection claims)
Acuity 800-242-7666
AGCS Marine 800-558-1606
Alabama Department of Insurance 334-269-3550
Alabama Municipal Insurance Corporation 866-239-AMIC
Alfa Insurance Group 888-964-2532
Allmerica 800-628-0250
Allstate 800-54-STORM (800-547-8676)
Allstate Floridian Insurance Company 800-54-STORM (800-547-8676)
America First Insurance 877-263-7890
America’s Health Insurance Plans (AHIP) 800-644-1818
American Bankers Insurance Company 800-245-1505
American Federation Insurance Company 800-527-3907
American General Property Insurance Company of Florida 800-321-2452
American International Group, Inc. (AIG) 877-244-0304
American National Property & Casualty Company & Affiliates 800-333-2860
American Reliable Insurance Company 800-245-1505
American Security Insurance Company 800-326-2845
American Skyline Insurance Company 888-298-5224
American States Insurance Company 888-557-5010
American Strategic Insurance 866-ASI-LOSS (274-5677)
American Superior Insurance 954-577-2202
Arch Insurance 800-817-3252
1920
Loss Diary/Workbook
2122
23
24
25
FEMA
Individual v. Public Assistance
26Individual Assistance
The Individuals and Households Program (IHP) can assist those affected
by the recent storms in Iowa by providing financial assistance for
housing or other needs. The program is available to all people who
qualify regardless of race, sex, religion, color or national origin. FEMA’s
IHP is available to both homeowners and renters.
The IHP has two provisions; Housing Assistance and Other Needs
Assistance.
Housing Assistance can provide funding for:
Referrals for rental housing
Financial assistance to rent a different place to live
Repairs to make the home safe, sanitary and functional
Replacement - financial assistance to replace destroyed homes
Other Needs Assistance may include funding for:
Medical, dental and funeral expenses
Essential personal property such as furniture, clothing and some
appliances
Repair or replacement of damaged vehicles
Other disaster-related expenses
27Individual Assistance(Continued)-
Individual assistance can also be in the form of federal low-interest
disaster loans from the U.S. Small Business Administration (SBA) for
homeowners, renters, businesses of all sizes, and private non-profit
organizations.
Homeowners may borrow up to $200,000 to repair or replace their
primary residence. Renters and homeowners may borrow up to $40,000
to replace personal property. Up to $2 million may be borrowed by
businesses for any combination of property damage or economic injury.
The SBA also offers working capital loans to small businesses and most
private, non-profit organizations of all sizes having difficulty meeting
obligations as a result of the disaster.
For information on SBA disaster loans, call (800) 659-2955 or visit
www.sba.gov. Hearing- or speech-impared individuals may call (800)
877-8339.
28Public Assistance
Under the Public Assistance Grant Program, FEMA awards grants
to assist state and local governments and certain private
nonprofit organizations with the response to and recovery from
disasters. The program provides funding for debris removal,
implementation of emergency protective measures and
permanent restoration of infrastructure. The program also
encourages protection from future damage by providing
assistance for hazard mitigation measures during the recovery
process. The program runs on a cost share with FEMA and the
applicant who may be the state or local governments.
Public assistance is based on a partnership between FEMA, state
and local officials. FEMA is responsible for managing the
program, approving grants and providing technical ...
29IRS Filing Issues and Dates
3031
Unless an act is specifically listed in Rev. Proc.
2018-58, the postponement of time to file and
pay does not apply to information returns in
the W-2, 1094, 1095, 1097, 1098, or 1099 series;
to Forms 1042-S, 3921, 3922 or 8027; or to
employment and excise tax deposits.
32Form 5500
This relief also includes the filing of Form 5500 series
returns, (that were required to be filed on or after
March 9, 2019 and before July 31, 2019, in the manner
described in section 8 of Rev. Proc. 2018-58. The relief
described in section 17 of Rev. Proc. 2018-58,
pertaining 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.
33Schreiber & Schreiber
Certified Public Accountants
Tax Return Filings
34Code Section 7508A
•Section 7508A provides the Secretary of Treasury with
authority to postpone the time for performing certain
acts under the internal revenue laws for a taxpayer
affected by a federally declared disaster as defined in
section 165(h)(3)(C)(i), or
•A terrorist or military action ……..
•The Secretary may specify a period of up to one year
may be disregarded in determining, …., in respect of
any tax liability of such taxpayer whether the
performance of acts were performed within the time
prescribed without regard to extension….
•Special rules regarding pensions
35Taxpayer Acts Eligible for Relief
• Filing of returns • Bringing a
• Payment of tax lawsuit upon a
claim for
• Contributions to credit/refund of
retirement plan tax
• Filing of a Tax • All eligible acts
Court Petition listed in Rev.
• Filing of a claim Proc. 2018-58
for refund (https://www.irs.gov/pu
b/irs-drop/rp-18-58.pdf)
3637
Affected Taxpayers
Any individual, any business entity or sole proprietor:
• whose principal residence or principal place of
business, is located in the covered disaster area
• who is a relief worker affiliated with a recognized
government or philanthropic organization and who
is assisting in the covered disaster area
• whose principal residence or principal place of
business, is not located in the covered disaster
area, but whose records necessary to meet a filing
or paying deadline are maintained in the covered
disaster area
38Affected Taxpayers (cont’d)
• Any estate or trust that has tax records necessary to
meet a filing or paying deadline in a covered disaster
area
• The spouse of an affected taxpayer, solely with
regard to a joint return of the husband and wife
• Any individual visiting the covered disaster area who
was killed or injured as a result of the disaster
• Any other person determined by the IRS to be
affected by a federally declared disaster
39Government Acts Eligible for Relief
• Assessing tax
• Giving or making any notice or demand for
payment of tax, or… to any liability to the US
in respect of any tax
• Collecting, by levy or otherwise, of any
liability
• Bringing suit ……
• Allowing a credit or refund
• Any other acts specified in a revenue ruling,
revenue procedure, notice, or other
guidance
40What 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 2018-58, 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 2018-58, Sec. 8. Additionally, the relief described in Rev Proc
2018-58, 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.
41Key Terms of §301.7508A-1
•Federally declared disaster area
•Relief from interest, penalties, additional
amounts, or additions to tax during
postponement period
•Acts eligible for relief
•Affected taxpayers
42
42Regulation 301.7508A-1
• Have a copy of the Regs
• Look at the eight examples in the
Regs
4344
From IRS:
The IRS automatically identifies taxpayers located
in the covered disaster area and applies automatic
filing and payment relief. But affected taxpayers
who reside or have a business located outside the
covered disaster area must call the IRS disaster
hotline at 1-866-562-5227 to request this tax relief.
45IRM 21.5.6.4.30 (10-01-2016)
-O Freeze
The -O (Disaster Indicator) freeze will only be input systemically by Information
Technology Services (IT) at the request of the Disaster Program Office or on a case-by-
case basis by Compliance personnel. Employees outside of Compliance will no longer
input the -O freeze.
Reminder:
Taxpayers will no longer self-identify for disaster relief by writing a disaster designation in
red at the top of their tax return.
The -O freeze allows for special penalty and interest calculations
The -O freeze suppresses some Master File and IDRS notices
The -O freeze does not freeze the module from refunding
The -O freeze may be systemically set on identified taxpayer accounts in presidentially
declared disaster areas
The -O freeze is released when the current date is beyond the secondary date (disaster
ending date) of the TC 971 AC 087
When performing account research the -O freeze is seen on CC ENMOD, CC IMFOLE
or CC BMFOLE.
If a Practitioner calls, is located in a covered disaster area and maintains records for
several taxpayers located outside the disaster area, inform the Practitioner to:
Call the Special Service line 1-866-562-5227
46IRM 21.5.6.4.30 (10-01-2016)
-O Freeze
Prepare an excel spreadsheet for 10 or more taxpayers and mail it to:
Internal Revenue Service
Special Services Section
1 Independent Drive Suite 500
Stop 6000
Jacksonville, FL 32202
Refer the practitioner to the IRS website for Tax-Professionals/Bulk-Requests-
from-Practitioners-for-Disaster-Relief, for additional information on completing
the spreadsheet.
For additional disaster related information refer to:
IRM 25.16.1.1, Overview, for disaster and emergency relief information on
administrative guidance and cross-functional operating procedures
IRM 20.1.2.1.2.2, Federal Disaster Area - IRC 7508A and IRM 20.2.7.11, IRC
7508A, Presidentially Declared Disaster or Terroristic or Military Actions
IRM 21.5.3.4, General Claims Procedures, for expedited processing of disaster
claims
A new -S freeze has been added to IMF and BMF Master File processing for
Presidentially declared disaster areas. Refer to IRM 21.5.6.4.37, -S Freeze, for
additional information.
47Bulk Requests from Practitioners for
Disaster Relief
Where the IRS has granted a postponement of time to file
returns and make payments in response to a federally
declared disaster, practitioners located in the covered
disaster area who maintain records necessary to meet a
filing or payment deadline for taxpayers located outside the
disaster area may elect to contact the IRS to identify such
clients. To identify the clients, the practitioner may contact
the IRS at 1-866-562-5227 or, alternatively, the practitioner
may use the following procedures if the practitioner
maintains the necessary records of a large number of
clients (ten or more):
48Bulk Requests from Practitioners for
Disaster Relief
Prepare a CD with info in an Excel Spreadsheet:
•Column A list their client's TINs
Note: List SSNs and EINs separately or indicate the TIN is
an SSN or EIN by placing dashes in their correct places
•Column B list the first four letters of the client’s last name
or the first four letters of the business name, using upper
case lettering. Do not use any periods, commas,
separators or any additional wording such as "the", etc.
Note: Use the first four letters of the taxpayer’s last name
on Trusts and Estates
49Bulk Requests from Practitioners for
Disaster Relief
•Do not include TINs of clients who live within the disaster
declared area. Click here for a zip code listing identifying
areas within the disaster area.
•Mail the CD to:
Internal Revenue Service
Special Services Section
1 Independent Drive, Suite 500;
Stop 6000
Jacksonville, FL 32202
•Be sure to include the Stop "6000" to ensure your request
is processed timely.
50Bulk Requests from Practitioners for
Disaster Relief
Include a cover letter with the CD requesting relief from
penalties and/or interest. The letter should also contain the
practitioner’s name and address and a statement that
identifies which disaster affected their clients. A copy of the
IRS news release may be helpful, but not necessary.
http://www.irs.gov/Tax-Professionals/Bulk-Requests-from-
Practitioners-for-Disaster-Relief
51Disaster Hotline Calls
•Document all calls for future reference
•Take down name and badge number
•Length of time of call
•Keep track of who you are transferred to
52Terms to be Used
• The later of the extended due date or the end of the
postponement period
• Original due date
• Postponed original due date per 7508A
• Extended due date
• Postponed extended due date per 7508A
537508A Information on Filing Returns
(Example-April 15th(original due date) or
XXXXXX(postponement original due date)
547508A Information on Filing Returns
“The later of the extended due
date or the end of the
postponement period”
(Example-October 15th(extended due date) or January
31st(end of postponement period)
557508A Information on Payments
Example 6. (i) A is an unmarried, calendar year taxpayer whose
principal residence is located in County W in State Q. A intends to
file a Form 1040 for the 2008 taxable year.
The return is due on April 15, 2009. A timely files Form 4868,
"Application for Automatic Extension of Time to File U.S.
Individual Income Tax Return.“
Due to A's timely filing of Form 4868, the extended filing deadline
for A's 2008 tax return is October 15, 2009.
Because A timely requested an extension of time to file, A will not
be subject to the failure to file penalty under section 6651(a)(1), if
A files the 2008 Form 1040 on or before October 15, 2009.
However, A failed to pay the tax due on the return by April 15,
2009, and did not receive an extension of time to pay under
section 6161. Absent reasonable cause, A is subject to the failure
to pay penalty under section 6651(a)(2) and accrual of interest.
56Example 6-There was a balance due on the original
due date of April 15th.
Important Terms:
• Extension of time to file-Yes
• Extension of time to pay-No(tax was due on 4/15)
• Interest accruing-Yes(balance due on 4/15-due date
for payment and filing)
57Extensions
http://www.irs.gov/businesses/small/article/0,,id=210
510,00.html
(06/09) Q: A taxpayer whose individual income tax return (Form
1040) is due to be filed on or before April 15, 2009, timely files an
extension of time to file the return under section 6081 thereby
extending the due date to October 15, 2009. If the county in which
the taxpayer resides is declared a federally declared disaster area
and, pursuant to section 7508A of the Internal Revenue Code, the
IRS postpones filing and payment obligations for the period
September 1, through November 2, 2009, when is the taxpayer’s
Form 1040 now due?
A: The due date for filing the individual income tax return
is the later of the end of the postponement period or the extended
due date. Here, the postponement period ends on November 2,
2009, which is later than the extended due date (October 15,
2009). Therefore, the taxpayer’s individual income tax return is
due November 2, 2009.
58Extensions-Continued
http://www.irs.gov/businesses/small/article/0,,id=210510,00.html
(06/09) Q: What is the effect of filing an extension of time to file under
section 6081, if, prior to the March 15, 2009, due date for filing a U.S.
Return of Partnership Income (Form 1065), an event in the state and
county in which the partnership was formed, results in the area being
declared a federally declared disaster area and, pursuant to section
7508A of the Internal Revenue Code, the IRS postpones filing and
payment obligations for the period March 1, 2009, through April 30, 2009?
A. The due date for filing the partnership return is the later of the
extended due date or the end of the postponement period. If the
partnership, which is an affected taxpayer with respect to the federally
declared disaster, filed an extension of time to file prior to the end of the
postponement period (April 30, 2009), the extension would relate back to
the original due date, March 15, 2009. The extension would run from
March 15, 2009, to September 15, 2009. Because the extended due date
(September 15, 2009) is later than the end of the postponement period
(April 30, 2009), the partnership’s Form 1065 is timely if filed on or before
September 15, 2009.(06/09)
59Extensions-Continued
http://www.irs.gov/businesses/small/article/0,,id=210510,00.html
(06/09) Q: A corporate taxpayer whose U.S. Corporation Income Tax Return (Form 1120) is due
to be filed on or before March 15, 2009, files an extension of time to file under section 6081
prior to the due date for filing the return thereby extending the due date to September 15, 2009.
If, as a result of a disaster, the county in which the corporate taxpayer’s principal place of
business is located is declared a federally declared disaster, and pursuant to section 7508A of
the Internal Revenue Code, the IRS postpones filing and payment obligations
for the period July 1, 2009, through August 30, 2009, when is the corporate
taxpayer’s Form 1120 now due?
A: The postponement period under section 7508A runs concurrently with any extensions of
time to file and pay under other sections of the Internal Revenue Code. The return is due the
later of the extended due date or the end of the postponement period. If the extended due date
occurs prior to the end of the postponement period, the return is due to be filed at the end of
the postponement period. If however, the postponement period ends prior to the extended due
date, the return is due to be filed on the extended due date. Here, the extended due
date (September 15, 2009) is later than the end of the postponement
period (August 30, 2009), therefore, the corporate taxpayer’s Form 1120
is due September 15, 2009. Unless the corporate taxpayer also filed an
extension of time to pay pursuant to section 6161, the corporate
taxpayer’s payment would be due on August 30, 2009, the last day of the
postponement period.
60Payment of Tax
7508A Regs-Example 2
Example 2. The facts are the same as in Example 1, except that because of the
severity of the hurricane, the IRS determines that postponement of government
acts is necessary. During 2009, Corporation X's 2005 Form 1120 is being examined
by the IRS. Pursuant to a timely filed request for extension of time to file,
Corporation X timely filed its 2005 Form 1120 on September 15, 2006. Without
application of this section, the statute of limitation on assessment for the 2005
income tax year will expire on September 15, 2009. However, pursuant to
paragraph (c) of this section, assessment of tax is one of the government acts for
which up to one year may be disregarded. Because September 15, 2009, falls
within the period in which government acts are postponed, the statute of limitation
on assessment for Corporation X's 2005 income tax will expire on November 30,
2009. Because Corporation X did not timely file an extension of time to pay,
payment of its 2005 income tax was due on March 15, 2006. As such, Corporation
X will be subject to the failure to pay penalty and related interest beginning on
March 15, 2006. The due date for payment of Corporation X's 2005 income tax
preceded the postponement period. Therefore, Corporation X is not entitled to the
suspension of interest or penalties during the disaster period with respect to its
2005 income tax liability.
61Fiscal Year Extensions
Returns due the 15th day of the third month following the year end(1065 and 1120S)
Year End Extension Due Date Extension Granted to Return/Extension would be due
1/31/2018 4/15/2018 10/15/2018 2/28/2019
2/28/2018 5/15/2018 11/15/2018 2/28/2019
3/31/2018 6/15/2018 12/15/2018 2/28/2019
4/31/2018 7/15/2018 1/15/2019 Extension and return would be
due 2/28/2019
5/31/2018 8/15/2018 2/15/2019 Return due on 2/28/2019
6/30/2018 9/15/2018 3/15/2019 Return due on 3/15/2019
7/31/2018 10/15/2018 4/15/2019 Extension would be due
2/28/2019
8/31/2018 11/15/2018 5/15/2019 Extension would be due
2/28/2019
9/30/2018 12/15/2018 6/15/2019 Extension would be due
2/28/2019
10/31/2018 1/15/2019 7/15/2019 Extension would be due
2/28/2019
11/30/2018 2/15/2019 8/15/2019 Extension would be due
2/28/2019
62Fiscal Year Extensions
Returns due the 15th day of the fourth month following the year end(1120 and 1041)
Year End Extension Due Date Extension Granted to Return/Extension would be due
1/31/2018 5/15/2018 11/15/2018 2/28/2019
2/28/2018 6/15/2018 12/15/2018 2/28/2019
3/31/2018 7/15/2018 1/15/2019 2/28/2019
4/31/2018 8/15/2018 2/15/2019 Return due 2/28/2019
5/31/2018 9/15/2018 3/15/2019 Extension would be due
1/31/2019
6/30/2018 10/15/2018 4/15/2019 Extension would be due
2/28/2019
7/31/2018 11/15/2018 5/15/2019 Extension would be duse
2/28/2019
8/31/2018 12/15/2018 6/15/2019 Extension would be due
2/28/2019
9/30/2018 1/15/2019 7/15/2019 Extension would be due
2/28/2019
10/31/2018 2/15/2019 8/15/2019 Extension would be due
2/28/2019
63Returns due the 15th day of the fourth month following the year end(1041)
(Extension is for 5 ½ months)
Year End Extension Due Date Extension Granted to Return/Extension would be due
1/31/2018 5/15/2018 10/31/2018 2/28/2019
2/28/2018 6/15/2018 11/30/2018 2/28/2019
3/31/2018 7/15/2018 12/31/2018 2/28/2019
4/31/2018 8/15/2018 1/31/2019 Return due 2/28/2019
5/31/2018 9/15/2018 2/28/2019 No Effect
6/30/2018 10/15/2018 3/31/2019 Extension would be due
2/28/2019
7/31/2018 11/15/2018 4/30/2019 Extension would be duse
2/28/2019
8/31/2018 12/15/2018 5/31/2019 Extension would be due
2/28/2019
9/30/2018 1/15/2019 6/30/2019 Extension would be due
2/28/2019
10/31/2018 2/15/2019 7/31/2019 Extension would be due
2/28/2019
64Fiscal Year Extensions
Returns due the 15th day of the fifth month following the year end(990)
Year End Extension Due Date Extension Granted to Return/Extension would be due
1/31/2018 6/15/2018 12/15/2018 2/28/2019
2/28/2018 7/15/2018 1/15/2019 2/28/2019
3/31/2018 8/15/2018 2/15/2019 Return due 2/28/2019
4/31/2018 9/15/2018 3/15/2019 No Effect
5/31/2018 10/15/2018 4/15/2019 Extension would be due 2/28/2019
6/30/2018 11/15/2018 5/15/2019 Extension would be due 2/28/2019
7/31/2018 12/15/2018 6/15/2018 Extension would be duse
2/28/2019
8/31/2018 1/15/2019 7/15/2019 Extension would be due 2/28/2019
9/30/2018 2/15/2019 8/15/2019 Extension would be due 2/28/2019
65Members Comment
My tax manager called the IRS number on the Isaac
notice. Very friendly agent, but in the course of 87
minutes, she was transferred to another person, who
transferred her to a third person, who transferred her to a
fourth person, who turned out to be the first person she
talked to! The person took our information, but, because
we had no power of attorney, could not confirm that they
took action on the account. However, our past experience
has been good in this regard.
I hear that someone from E&Y called the disaster hotline
and the answering agent asked “What is Hurricane Isaac?”
66IRS Notices
List in correspondence:
News release(be specific)(For Nebraska Spring
Flooding-NE-2019-02)
FEMA Declaration Number(FEMA-DR-4420)
Affected taxpayer
Affected area
Covered by 7508A
Relief from penalty and interest
OR
Contact Disaster Hot Line of Practitioner Hot Line
67IRS Notices
•Internal Revenue Manual •20.1.1.3.2 (12-11-2009)
•http://www.irs.gov/irm/part2 Reasonable Cause
0/irm_20-001-001r.html •20.1.1.3.2.2.2 (12-11-2009)
Fire, Casualty, Natural
Disaster, or Other
Disturbance
6869
Terms for Returns Impacted by Flooding
• “Original” due date
• “Postponed” original due date
• “Original extended” due date
• “Postponed extended” due date
• Extension of time to file (6651(a)(1))
• Due date for payment of tax (6161)
• Interest accrual date (6651(a)(2))
70Sample Practice Chart for 7508A Delays
Louisiana 2016 Flooding
(2-7508A Delays)
Original Postponed Original Extended Original Postponed
Due Due Date Due Date Extended Due Date
Date
August 4/15 4/15 10/17 1/17
Flooding
Spring 4/15 7/15 10/17 1/17
Flooding
St. Tammany 4/15 7/15 10/17 1/17
Tangipahoa
Livingston
71Sample Practice Chart for 7508A Delays
Hurricane Michael
Original Due Date Extended Original Due Date Postponed Extended
Due Date
4/15/2018 10/15/2018 2/28/2019
72Qualified Disaster Payments
Section 139(a) provides gross income does not include amounts
received by an individual for a qualified disaster payment.
Section 139(b) defines “qualified disaster payments” as amounts
paid for the benefit of an individual to:
1. Reimburse or pay reasonable and necessary personal, family,
living, or funeral expenses incurred as a result of a disaster
2. Reimburse or pay reasonable and necessary expenses to
repair or rehabilitate a personal residence or repair or
replacement of contents to the extent that the need for such is
due to a disaster
3. Payments by a Federal, State, or local government in
connection with a qualified disaster in order to promote the
general welfare.
73Qualified Disaster Payments-Continued
Section 139 (c) defines the term “qualified disaster” as:
1. A disaster resulting from terrorist or military action
2. A Federally declared disaster
3. A disaster resulting from any event the Secretary determines
to be of a catastrophic nature
4. A disaster determined by applicable Federal, State, or local
authority that warrants assistance from Federal, State, or local
authority governmental agencies.
74Qualified Disaster Payments-Continued
Revenue Ruling 2003-12 (https://www.irs.gov/pub/irs-drop/rr-03-
12.pdf) offers guidance indicating individuals who are disaster
victims will generally not to have to pay income tax on assistance
payments they receive. The revenue ruling provides taxpayers in
a Federally declared disaster area who receive grants from state
programs, charitable organizations or employers to cover
medical, transportation, or temporary housing expenses do not
include these grants in their income.
Prior to the issuance of this 2003 revenue ruling, there was only a
1953 revenue ruling on this subject (Rev.Rul. 131, 1953-2 C.B.
112). This revenue ruling concluded that payments made by an
employer to employees who were victims of a disaster do not
come “within the concept of gross income.”
75Qualified Disaster Payments-Continued
It is important to note the following terms in interpreting the relief
available to disaster victims:
• Qualified disaster payments
• Reasonable and necessary personal, family, living, or funeral
expenses
• Reasonable and necessary expenses for repairing a personal
residence or contents
• Other disaster payments for a Federal, State, or local
authority (FEMA payments).
This is a means of assisting disaster victims, not a blank check
for unlimited spending without tax consequences.
This 2003 revenue ruling and the applicable sections of Code
Section 139 provide a means for employers to be able to assist
their employees in restoring normality in their lives and also
provide assurance to disaster victims there will not be income tax
consequences on the qualified disaster payments they receive.
76E Mail Future Questions to:
ghschreiber@bellsouth.net
77Questions
78Thank You
Presented by:
Gerard H. Schreiber, Jr.
ghschreiber@bellsouth.net
504-832-1819
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