Victims of severe storms, tornadoes, straight-line winds and flooding that began on April 28, 2014, in parts of Alabama may qualify for tax relief from the IRS. The counties of Baldwin, Jefferson, Lee and Limestone have been declared federal disaster areas. Individuals who reside in or have a business in these areas will have until October 15, 2014, to file tax returns and pay any taxes due. This includes the May 15 deadline for many tax-exempt organizations to file their annual Form 990 and the June 16 and September 15 deadlines for making quarterly estimated tax payments.
The IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after April 28, and on or before May 13, as long as the deposits are made by May 13, 2014. The postponement of time to file and pay does not apply to information returns in the Form W-2, 1098, or 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause.
Taxpayers in the covered disaster area can claim disaster-related casualty losses on their federal income tax returns for either 2013 or 2014. Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. Taxpayers claiming the disaster loss on their 2013 returns should write the disaster designation “Alabama/Severe Storms, Tornadoes, Straight-line Winds and Flooding” at the top of their returns in order to allow the IRS to expedite processing of refunds. The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should add the assigned disaster designation at the top of Form 4506, Request for a Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS. (Alabama Disaster Relief Notice (AL-TN-2014-20).)
For more information on this and other topics, consult the Visit our News Library.