IRS Tax Relief for Victims of April Storms in Alabama
Victims of storms, tornadoes, straight-line winds, and flooding beginning April 15, 2011 in parts of Alabama may qualify for tax relief from the Internal Revenue Service.
The President has declared the following Alabama counties a federal disaster area: Autauga, Bibb, Blount, Calhoun, Chambers, Cherokee, Chilton, Choctaw, Clarke, Colbert, Coosa, Cullman, Dallas, DeKalb, Elmore, Escambia, Etowah, Fayette, Franklin, Greene, Hale, Jackson, Jefferson, Lamar, Lauderdale, Limestone, Madison, Marengo, Marion, Monroe, Morgan, Perry, Pickens, Shelby, St. Clair, Sumter, Talladega, Tallapoosa, Tuscaloosa, Walker, Washington and Winston. Individuals who reside or have a business in these counties may qualify for the Alabama tax relief.
Affected taxpayers include those who reside or have a principal place of business in the presidentially declared disaster area, as well as persons outside the area whose records are located in the designated disaster area, all relief workers affiliated with recognized government or philanthropic organizations that assisted in the relief efforts, and any individual visiting the designated disaster area who was killed or injured as a result of the disaster.
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.
The IRS is postponing until June 30, 2011 certain deadlines for taxpayers who live or have a business in the disaster area. Persons who qualify for assistance were granted an extension to June 30 to file most tax returns, pay taxes, including estimated taxes, and perform other time-sensitive acts otherwise due on or after April 14 and on or before June 30. This includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an individual retirement account (IRA).
While this relief also applies to the filing of Form 5500, the postponement of the time to file and pay does not apply to information returns in the Form W-2, 1098 or 1099 series, to Forms 1042-S or 8027, or to employment or excise tax deposits.
If an affected taxpayer receives a penalty notice from the IRS, you should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.
However, penalties for failure to timely file information returns can be waived, for reasonable cause, under existing procedures. In addition, the IRS will abate penalties for failure to make timely employment and excise tax deposits due on or after April 14 and on or before May 2 provided the taxpayer made these deposits by May 2.
The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.
The IRS reminds taxpayers who suffer a casualty loss as a result of a federally declared disaster that they have the option of claiming disaster-related casualty losses on their federal income tax returns for either 2010 or 2011. Taxpayers claiming disaster-related casualty losses on their 2010 returns should mark the top of their tax returns "Alabama/Severe Storms, Tornadoes, Straight-Line Winds, and Flooding" to expedite refunds.
PBS will keep you updated as new information is announced. If you have questions about how this affects your business, please contact your PBS payroll specialist.
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