[Glenn Gizzi] Good day, everyone.
My name is Glenn Gizzi and I am a senior stakeholder liaison with the IRS in New Jersey and I will be your moderator for today's call.
Thank you for participating in our webinar on IRS Disaster and Emergency Relief.
We have three presenters on today's webinar and you will find a link to more information about them on this Web page.
You'll also find a link to a PDF file of this presentation, in case you would like to download or print a copy.
And with that, I'll turn it over to our first presenter, Tom Peters.
[Tom Peters] Thank you, Glenn.
We begin this webinar with some information on the IRS Disaster Relief Program.
The IRS has a special program office that coordinates the granting of administrative tax relief to taxpayers and tax professionals affected by federally-declared disasters.
Assistance may also be provided in major emergency situations.
The IRS has authority, under Internal Revenue Code sections 6081 and 6161, to suspend filing and payments of currently due taxes and the completion of certain time sensitive actions, without penalty, for up to six months.
In the event of a federally declared disaster, Internal Revenue Code section 7508A allows for the suspension period to run up to 12 months and includes the abatement of interest on currently due taxes.
The IRS will generally grant relief to affected taxpayers in areas identified by the Federal Emergency Management Agency (FEMA) to qualify for individual assistance to households and families.
This is called the IRS designated disaster area and is generally identified within a given state by county.
The IRS may offer various types of relief to taxpayers and tax professionals affected by a disaster or major emergency.
As I previously stated, IRS may postpone the deadline for the filing and payment of current taxes as well as the deadline for the completion of certain time sensitive actions.
IRS Revenue Procedure 2007-56 contains a listing of what time sensitive actions may be postponed under Revenue Code 7508A.
In the event relief is granted, the IRS will issue a notice or news release providing information on postponed actions.
Failure to file and pay penalties may be abated.
Requests for tax transcripts and copies of filed returns will be expedited and associated fees may be waived.
The IRS may also relax rules on certain regulatory certifications.
One example is relaxing the low income housing resident income limitation.
Final regulations under section 7508A were issued on January 15, 2009.
The final regulations clarify that disaster relief periods run concurrently with extensions in place via other sections of the Internal Revenue Code.
The regulation also expanded the definition of "affected taxpayer" to include any taxpayer visiting a covered disaster area who was killed or injured as a result of the disaster.
Another change is that taxpayers not located in the designated disaster area now must have records located there that are necessary to meet a suspended tax deadline in order for them to qualify for relief.
When relief is granted, affected taxpayers will include:
Taxpayers whose principal residence or principal place of business is located in the IRS designated disaster area.
Taxpayers whose records necessary to meet a deadline occurring during the postponement period are located in the IRS designated disaster area.
Relief workers affiliated with a recognized government or philanthropic organization assisting with the relief activities in the IRS designated disaster area, and any individual visiting the IRS designated disaster area who was killed or injured as a result of the disaster.
IRS computers will systemically identify taxpayers whose address of record is within the designated disaster area and code their account for the relief.
Other affected taxpayers will need to contact the IRS toll free disaster line at 1(866) 562-5227 to self-identify.
The assistor will manually code their account for the relief.
Tax professionals in the disaster area who possess client records necessary to meet a deadline postponed by the relief and whose client is outside of the covered disaster area, may contact the IRS and identify the client for relief.
The toll free disaster line can be used to identify up to 10 clients.
The IRS has a procedure for handling bulk requests.
The procedures are available at the Disaster Relief Resource Center for Tax Professionals on irs.gov.
Each time the IRS grants tax relief to disaster victims, IRS Media Relations will issue a news release detailing the relief and identifying the designated disaster area.
These news releases are categorized by state and posted on irs.gov, Keyword, 'Around the Nation.'
After a federally declared disaster where FEMA declared individual assistance to households and families FEMA will establish Disaster Recovery Centers to assist victims.
After major disasters, IRS may provide staff at the sites to assist taxpayers with disaster related issues.
These staff members provide information on granted tax relief, distribute related publications, answer questions on disaster tax rules and may assist with record reconstruction efforts.
The IRS has various Memorandums of Understanding with other agencies to provide expedited tax information to assist with disaster victim benefit determinations.
In major disasters the IRS may assign toll free staff to assist FEMA with disaster victim tele-registrations.
As previously mentioned, the IRS has established a special toll free line dedicated to handling account related disaster relief issues and to allow taxpayers to self-identify.
The number is 1 (866) 562-5227.
Next, Deborah Rodgers will provide you with some information on how you can assist your clients in preparing for a disaster.
[Deborah Rodgers] Thank you Tom.
My information will help you in preparing a plan before a disaster strikes.
Business continuity planning and similar preparedness efforts are often seen as either unrelated to the business plan or at best, a necessary evil.
Those businesses that do have a plan seldom review it for consistency with the current state of the business.
A plan written three years ago is likely incompatible with the existing business.
The reality is that business continuity is a strategic investment that helps a business stay competitive, even in the face of temporary disruption.
First, you need to be informed - Know what kinds of emergencies might affect your company.
Next, carefully assess how your company functions, both internally and externally.
What does continuity of operations mean?
Business continuity planning must account for all hazards (both man-made and natural disasters).
You should plan in advance to manage any emergency situation.
Assess the situation.
Use common sense and available resources to take care of yourself, your co-workers and your business's recovery.
How quickly your company can get back to business after a terrorist attack or tornado, fire or flood often depends on emergency planning done today.
Start planning now to improve the likelihood that your company will survive and recover.
Emergency planning for employees, I will discuss this later.
Your employees and co-workers are your business's most important and valuable asset.
The next few topics are all extremely important, but are not a part of this presentation.
You can find good resources and information on all of these through several national Web sites, as well as your own state's emergency management division.
We'll provide you with some resources and Web links after the presentation.
Emergency supplies - Think first about the basics of survival: fresh water, food, clean air and warmth.
Deciding to stay or go - Shelter-in-place or evacuate?
Plan for both possibilities.
Fire safety - Fire is the most common of all business disasters.
Medical emergencies - Take steps that give you the upper hand in responding to medical emergencies.
Carefully assess how your company functions, both internally and externally, to determine which staff, materials, procedures and equipment are absolutely necessary to keep the business operating. Review your business process flow chart if one exists.
Identify operations critical to survival and recovery.
Include emergency payroll, expedited financial decision-making and accounting systems to track and document costs in the event of a disaster.
Establish procedures for succession management.
Include at least one person who is not at the company headquarters, if applicable.
Identify your suppliers, shippers, resources and other businesses you must interact with on a daily basis.
This may include third parties you and your suppliers need, such as a shipping company.
When considering how to protect your supply lines, think about the following concepts:
Diversity - Develop professional relationships with more than one company to use in case your primary contractor cannot service your needs.
A disaster that shuts down a key supplier can be devastating to your business.
You may even want to look for one out of state in case your local and regional suppliers are disrupted by a disaster.
Supplier Continuity- Does your supplier have a business continuity plan?
Ask that supplier how they intend to serve you in the event there is a disruption of the local transportation system.
Your business continuity planning may have you well prepared but if a critical supplier is not, then you are likely to be disrupted, despite your planning.
Memorandums of Understanding (MoU's)- If you find yourself in the unfortunate situation of having to replace critical assets after a disaster understand that you will find yourself in competition with everyone else who needs those same assets.
Having an informal agreement or a formalized agreement with a supplier could benefit you.
If limited assets or supplies are available those businesses that have established contracts or agreements - MoU's - beforehand with the supplier will receive priority over those who have not.
However, depending on the disaster, some suppliers may not be able to meet your needs or may sell their inventory to the highest bidder, despite having an MoU.
Limited Stockpiling- If you have a little extra storage space, consider stockpiling those inventory items that are the most critical to your business operations.
Usually 3-7 days worth is sufficient.
Resource Pooling (Mutual Aid Agreements) - Consider entering into an agreement with a friendly competitor that you will share resources between you in the event of a disaster.
Just like an MoU, this is dependent upon the ability and willingness of the other party to provide resources when you need them.
If the disaster is regional, the other party may be unable to help you.
Create a contact list for existing critical business contractors and others you plan to use in an emergency.
Keep this list with other important documents on file, in your emergency supply kit and at an off-site location.
No other area of business continuity planning benefits as much from effective pre-disaster planning as does supply chain protection.
Also, no other area is so prone to oversight.
Beware of assumptions and take the time now to confirm with your suppliers and any related third parties with regards to your expectations.
The absolute worst time to be surprised on supply-chain realities is in the middle of a crisis.
Plan what you will do if your building, plant or store is not accessible.
This type of planning is often referred to as a continuity of operations plan or COOP, and includes all facets of your business.
Consider whether you can run the business from a different location or from your home.
Develop relationships with other companies to use their facilities in case a disaster makes your location unusable.
Identify production machinery, computers, custom parts and other essential equipment needed to keep your business open.
Plan how to replace or repair vital equipment.
Store extra supplies for use in an emergency.
Inadequate insurance coverage can lead to major financial loss if your business is destroyed, damaged or simply interrupted for a period of time.
Find out what records your insurance company will need to see after an emergency.
Store them in a safe place.
Look at which utilities are vital to your business's day-to-day operations.
Identify alternatives such as generators to power vital aspects of your business in an emergency.
Try to get all financial records in electronic format.
Store copies off site-at least 50 miles from your main business.
Keeping photocopies of vital records at home can be a good idea.
If you ever need to apply for a Small Business Administration loan to assist with recovery you will need to provide various legal and financial forms.
Photograph or videotape the contents of your business and/or office, room by room.
Decide who should participate in putting together your emergency plan.
Consider a broad cross-section of people from throughout your organization, but focus on those with expertise vital to daily business functions.
These will likely include people with technical skills as well as managers and executives.
Make sure those involved know what they are supposed to do.
Train others in case you need back-up help.
Meet with other businesses in your building or industrial complex.
Talk with first responders, emergency managers, community organizations and utility providers.
Plan with your suppliers, shippers and others you regularly do business with.
Share your plans and encourage other businesses to set in motion their own continuity planning and offer to help others.
Emergency plans should be reviewed annually.
When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.
Plan for payroll continuity.
Employers who fail to make payroll for even short durations may see an increase in employee absenteeism and even departures for companies who are making payroll despite a disaster.
This can cause a secondary crisis for your business that will further complicate your efforts to recover.
Payroll should be high on the list of preparedness and continuity planning for a small business owner.
Here are some things to consider:
Encourage your employees to use direct deposit rather than receiving paper checks.
Meet with your financial institution and find out what they can do to help you if you are struggling to make payroll after a disaster.
Talk with your employees about your ideas on how to ensure payroll if your business is interrupted.
Ask for their input on how to protect payroll.
Make sure payroll providers have fiduciary bonds.
Employers who use payroll service providers should ask the provider if they have a fiduciary bond in place.
The bond could protect the employer in the event of default by the payroll service provider.
Employee preparedness is the single most important effort that a business owner can undertake to ensure the business will survive a disaster and recover.
Employees are the single most important asset in the company.
Without employees, there is no business.
Those employees who work for employers who have taken the time to help them prepare themselves and their families are more likely to be effective during a disaster and the recovery phase.
Encourage them to have a plan, make a kit and get informed on the realities of disaster.
Next, Anita Douglas will go over some good information on record reconstruction.
[Anita Douglas] Thank you, Deborah.
We will begin with paperless recordkeeping.
Another pre-planning step is protecting your records.
Deborah mentioned this in her presentation.
I just want to expand upon it a little bit more.
Going paperless for recordkeeping is having all of your financial records in electronic format.
For instance, this means getting your bank statements and other financial documents by e-mail.
For records you do not receive in electronic format, you may want to consider investing in a scanner to fill in the gaps.
You might also want to consider copying all of your records onto a CD, DVD, or jump drive periodically.
You might consider storing information with a relative or someone you trust in another city for safekeeping in case your normal computer back-up systems are destroyed.
Whenever possible, vital records should be stored off-site, preferably with a copy in a location that is at least 50 miles from your main business location.
There are numerous record storage firms you can check into.
What you need to consider when conducting your search for a reputable storage firm is one that provides adequate physical security and ensures a timely response to any requests for records you may have.
Here is a list of the most common vital records.
Keeping photocopies of vital records at home can be a good idea also.
If you ever need to apply for a Small Business Administration loan to assist with recovery, you will need to provide various legal and financial forms, including: Personal financial statements, current profit and loss statement, current balance sheet and a list of debts.
Another pre-planning step you can take is to photograph or videotape the contents of your business and/or office, going room by room.
You will want to store copies of these records in another location or city away from your business location.
Now let's review some helpful information for reconstructing records after a disaster has occurred.
Reconstructing records may not be easy but it may become essential for several reasons.
The records will be necessary for tax purposes.
The records can also assist you in getting federal assistance from agencies like FEMA or from the Small Business Administration
And these records can assist you with claiming insurance reimbursement.
I will start with reconstructing business records.
For outside the building, you will want to include any shrubbery, signs on the premises, awnings, parking, etc.
If you purchased an existing business, you might want to go back to the broker for a copy of the purchase agreement.
This should detail what was acquired.
If the building was constructed for you, contact the contractor for building plans, or the county or city planning commissions for copies of any plans.
For inside the building, you will want to include what equipment was where.
If it was a store, you will want to include the location of the products or inventory.
For inventories, you can get copies of invoices from suppliers.
Whenever possible, the invoices should date back at least one calendar year.
For reconstructing income, you can get copies of bank statements.
The deposits should closely reflect what the sales were for any given time period.
You can also obtain copies of last year's federal, state and local tax returns including sales tax reports, payroll tax returns and business licenses (from city or county).
These will reflect gross sales for a given time period.
I'll cover information on requesting your federal tax returns next.
Some of you may be aware that the IRS no longer provides return or information return transcripts in our Taxpayer Assistance Centers.
These have to be requested by phone or mail, or through a preparer who has qualified for the Transcript Delivery Service through IRS e-services.
If necessary, file Form 4506 to secure copies of the previous four years of income tax returns.
IRS maintains a listing of ZIP codes located within the affected areas.
Only forms filed with these ZIP codes can have the fees waived.
You need to remember to notate the top of Form 4506 with the disaster information, in red.
This will help to expedite your request and alert the IRS to waive the $57.00 fee that is normally charged.
Publication 2194, Disaster Losses for Individuals, and Publication 2194-B, Disaster Losses for Business, both include Forms 4506 and 4506-T.
You can also download them from irs.gov.
Use the current property tax statement for land vs. building ratios.
If it is not available, contact the county assessor's office.
Check with a local appraiser or real estate company for a list of comparable sales to determine the fair market value.
In addition to the actions shown on this slide, you will want to take photographs as quickly as possible to establish the extent of damage.
You can also contact the title company or bank that handled the purchase for copies of escrow papers.
For inherited property, you can check court records for probate values.
Check with county assessor's office for old records about the property.
Obtain a copy of the deed for the property.
If the home was custom built, contact the contractor to see if records are available.
Most insurance policies list a value of the building to establish a base figure for replacement value insurance.
Get written accounts from friends and relatives who saw the house or building before and after any improvements were made.
The number and types of personal property may make it difficult to reconstruct records.
One of the best methods is to draw pictures of each room.
Make a diagram or floor plan of the property and the location of personal property.
This does not have be professionally done; just functional.
Reconstruct from the original cost invoices or old sales catalogs.
Fair Market Value can be determined through local thrift stores, local newspapers and information maintained at the library.
Try to locate photographs of electronics, computers, appliances, jewelry, etc.
You might also want to get old catalogs.
This is a great way to establish cost and fair market value.
You can also take a walk through your local thrift store and look at comparable items such as kitchen gadgets, looking for odds and ends you may have but had forgotten about because they were not used often.
I also want to mention that Publication 2194 has taken the home and broken it down by room, such as living room, dining room, bedroom, etc. and listed items typically located there.
There is also space at the bottom of each page to list items not included.
Here are some suggestions to value vehicles.
Valuation services are available on the Internet.
Contact the selling dealer or lender for a copy of the contract.
Provide facts about the vehicle for a comparable price figure.
Use newspaper ads for the period in which the vehicle was purchased to determine the cost.
For reconstruction of vehicle mileage, contact your dealer or repair location for repair records.
You might also research old newspapers at the local library.
If you are still making payments, check with your lien holder.
I will now turn you back over to Tom Peters.
[Tom Peters] Thank you, Anita. I would like to spend some time highlighting the special tax rules available to victims of federally declared disasters.
Previously, when a major disaster struck, Congress would draft legislation providing targeted tax benefits for taxpayers affected by the disaster that were specific to that particular disaster.
These were used as incentives to revive affected areas.
Examples include legislation passed after the 2005 hurricanes, the 2007 Kansas tornadoes, and in 2008, Hurricane Ike and the Midwest floods.
The National Disaster Relief Act of 2008, Subtitle B or Title VII of the Emergency Economic Stabilization Act of 2008, signed into law on Oct. 3, 2008, as Public Law 110-343, provides tax relief for victims of federally-declared disasters occurring after Dec. 31, 2007, and before Jan. 1, 2010.
The National Disaster Relief Act applies to taxpayers with losses from a disaster when the President invokes the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
These declarations are listed on FEMA's Web site at FEMA.gov.
Simply click on the "disaster declaration" link.
The IRS has developed a Fact Sheet with details of the provisions of the National Disaster Relief Act. It is FS-2009-8 and can be found on irs.gov.
I will now provide you with highlights of this new legislation.
A disaster loss deduction can be claimed regardless of the taxpayer's adjusted gross income, as the 10% of AGI limitation does not apply.
Personal disaster losses must be reduced by $100 in 2008, $500 in 2009, and $100 in 2010.
Taxpayers who do not itemize their deductions can increase their standard deduction by the amount of their net disaster loss.
Taxpayers can elect to take their loss on their prior tax year return.
The National Disaster Relief Act allows taxpayers the election to currently deduct qualified disaster expenses in the tax year paid or incurred.
Qualified disaster expenses consist of expenditures paid or incurred in connection with a trade or business or with business-related property that otherwise must be capitalized.
In order to qualify, expenses must be:
For the abatement or control of hazardous substances that were released on account of a federally declared disaster;
For debris removal or demolition of structures on real property damaged or destroyed by a federally declared disaster;
or for the repair of business-related property damaged by a federally declared disaster.
In general, a net operating loss is carried back two years and carried forward 20 years.
However, the National Disaster Relief Act allows taxpayers to carry back a qualified disaster loss five years.
A qualified disaster loss is the lesser of the taxpayer's net operating loss for the taxable year or the sum of the following:
The taxpayer's losses allowable under section 165 of the Internal Revenue Code for the taxable year attributable to a federally declared disaster occurring before Jan. 1, 2010, and occurring in a disaster area;
and The taxpayer's deduction for the taxable year for qualified disaster expenses allowable under section 198A of the Internal Revenue Code.
A taxpayer can elect to disregard the five-year carryback rule for their qualified disaster loss by electing out of the five-year carryback by the due date of their return, with extension.
A qualified disaster loss is treated as a net operating loss that is separate from the taxpayer's regular NOL.
The taxpayer should remember that this election is irrevocable.
The National Disaster Relief Act provides a special 50 percent depreciation allowance for purchases of qualified disaster assistance property.
It allows taxpayers to deduct 50 percent of the cost of qualified disaster assistance property, and then take a normal depreciation deduction on the balance.
This new special 'bonus depreciation' allowance applies to most types of tangible personal property and computer software acquired on or after the date on which the federally declared disaster occurs, and placed in service on or before Dec. 31 of the third year following the date on which the federally declared disaster occurs.
In addition, the new bonus depreciation allowance applies to most nonresidential real property and residential rental property acquired on or after the date on which the federally declared disaster occurs, and placed in service on or before Dec. 31 of the fourth year following the date on which the federally declared disaster occurs.
To qualify for the new bonus depreciation allowance, 80 percent or more of the use of the property must be in the disaster area and in the active conduct of a trade or business by the taxpayer in that disaster area.
Also, the property owner must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the federally declared disaster and must be similar in nature to, and located in the same county as the property being rehabilitated or replaced.
An election out for any class of property will apply to all property of said class.
In general, a taxpayer may elect to expense up to a certain amount or dollar limit of section 179 property placed in service during the tax year.
However, this dollar limit is reduced, but not below zero, if the cost of section 179 property placed in service during that year exceeds a certain amount or reduced dollar limit.
For 2008, the dollar limit is $250,000 and the reduced dollar limit is $800,000.
The National Disaster Relief Act increases the limits that businesses can expense for qualified section 179 disaster assistance property.
Generally, the new law increases the dollar limit that is normally available for a particular tax year by the lesser of $100,000 or the cost of qualified section 179 disaster assistance property placed in service during that year.
Also, the new law generally increases the reduced dollar limit that is normally available for a particular year by the lesser of $600,000 or the cost of qualified section 179 disaster assistance property placed in service during that year.
Qualified section 179 disaster assistance property is section 179 property that is qualified disaster assistance property for purposes of the new bonus depreciation allowance provided under the National Disaster Relief Act.
Section 179 property is most types of tangible personal property and off-the-shelf computer software.
The new law did not change the amount that a taxpayer can elect to expense for certain sport utility vehicles and certain other vehicles placed in service during the tax year.
Accordingly, a taxpayer cannot elect to expense more than $25,000 of the cost of these types of vehicles.
Deborah will now go over some resources you can refer to for further information on today's topics.
[Deborah] The following slides provide some resources you can use when working disaster related issues with your clients.
The IRS Web site at irs.gov has some excellent resources.
You can use the Keyword 'disaster' and also try the following Search terms to view the information you're interested in: Emergency planning, FAQs, Record reconstruction, we'll talk about this a little more later, and Practitioner Resource Center.
To view IRS disaster relief news releases, enter "around the nation."
The news releases are categorized by state.
There are many forms, publications, and fact sheets, all available at irs.gov, that provide valuable assistance in reconstructing records.
Form 4506, Request for Copy of Tax Return, Form 4506-T, Request for Transcript of Return IRS Publication 547 contains some very good information on the tax reporting of Casualty Losses.
Publication 2194, For Individual Losses, Publication 2194B, For Business Losses, Reconstructing Your Records, FS-2006-7 IRS Fact Sheet FS-2009-8 contains highlights of the National Disaster Act of 2008.
To resolve any disaster related tax account issues you can contact the IRS Disaster Hotline, at 1(866) 562-5227.
And finally, to secure information on federally declared disasters visit the FEMA Web site at FEMA.gov and click on the "disaster declaration" link.
On behalf of our Stakeholder Liaison team, thank you for your time and attention today.
Now I'll turn it back to Glenn Gizzi, our moderator.
[Glenn] Thank you for that comprehensive and informative presentation.
Now we'll turn to some of the questions we've received.
I'll give the first one to Tom.
"Does the IRS grant federal tax relief to taxpayers in every federally-declared disaster?"
[Tom] A federally-declared disaster is one in which the President invokes the Robert T. Stafford Disaster and Emergency Assistance Act commonly referred to as the Stafford Act.
There are different types of federal disaster relief associated with the Stafford Act.
Some of the relief only reimburses state governments for disaster-related expenses.
The IRS will generally grant federal tax relief when FEMA provides individual assistance to households and families, and not when only public assistance is provided to state governments.
During 2008 there were 75 major disaster declarations, of which 35 included individual assistance.
The IRS granted relief to affected taxpayers in each of the 35 individual assistance declarations.
[Glenn] Thank you.
I'll ask Anita to respond to the next question, which reads, "Where can I find specific information on disaster relief that has been granted by the IRS?"
[Anita] IRS news releases provide details on the relief that was granted.
You can access irs.gov and enter the Search term "around the nation" in the search box to see the news releases.
They are listed by state and will include specific information on the level of relief granted, as well as the counties making up the IRS designated disaster area.
[Glenn] Thanks, Anita.
Deborah, here's one for you. "What determines the relief period start date?"
[Deborah] IRS uses the incident date FEMA lists on their disaster declaration as the disaster relief start date.
It can take up to several weeks for a disaster declaration to be issued after the incident takes place.
IRS programming is retroactive to the incident date.
[Glenn] That's good news, thanks, Deborah.
Back to Tom.
Here's one about an IRS notice. It reads, "My client received a notice with penalties and interest even though they reside in a disaster area where IRS granted relief.
What can I do to check this out?"
[Tom] Your client, or you if you have a valid Power of Attorney, can contact the disaster toll free line at 1(866) 562-5227 for assistance since this is an account related issue.
[Glenn] Ok. And again, that number is toll-free, 1(866) 562-5227, and it's on the IRS Web site. The next question is for Anita.
"Are there any disaster resources on the IRS Web site designed especially for tax practitioners?"
[Anita] Oh, yes! IRS has a designated page on the Web called Disaster Relief Resource Center for Tax Professionals.
It contains disaster-related Frequently Asked Questions, IRS guidance, and links to disaster related publications and other resources.
You'll also find the process for the bulk requests for relief for qualified clients.
Enter keyword "disaster" in the search box at irs.gov.
Then select "Tax Relief in Disaster Situations" to take you to the practitioner page.
[Glenn] Thank you, Anita.
Here's a question now for Deborah about someone traveling into a disaster area to help.
It reads "I have a client who traveled into a disaster area on behalf of the Red Cross to provide assistance to victims.
Does he qualify for the relief granted?"
[Deborah] Well, yes.
Your client is an affected taxpayer as he was working for a recognized philanthropic organization in a designated disaster area.
However, since he does not reside in the disaster area he would have to contact the IRS and identify himself for the relief.
Advise him to call the Disaster Hotline at 1 (866) 562-5227, and explain his situation.
The IRS assistor will manually code his master file account for the relief.
[Glenn] Now, back to Tom with an extension question.
It says, "I have a valid Form 4868 on file which extends the due date of my Form 1040 until October 15th.
IRS has granted a 60-day disaster relief period from May 1st until June 30th.
How does that affect my October 15th due date?"
[Tom] The final regulations under 7508A state that a disaster relief period runs concurrently with extensions in effect due to other sections of the Internal Revenue Code.
Your filing date is the later of the disaster end date, or the extension date.
In this case, your filing date would remain October 15.
[Glenn] Thanks, Tom. Deborah, here's a question about late filing.
It reads, "My client resides in an area that suffered severe storms and she suffered major damage to her residence.
No relief was ever granted and she was unable to meet her return filing date.
Is there any way she can have any late filing penalties abated?"
[Deborah] In this instance your client may qualify for penalty abatement under IRS reasonable cause criteria.
She can request abatement by writing or calling the IRS using the contact information appearing on her notice and explain her reasons for late filing.
If you have a valid Power of Attorney, you can make the request on her behalf.
[Glenn] Anita, "Does the IRS have any specific information on the Web site concerning the National Disaster Tax Relief Act of 2008?"
[Anita] Yes we do.
IRS Fact Sheet Number FS-2009-8 highlights the benefits of the National Disaster Tax Relief Act.
You'll find the fact sheet is at irs.gov.
Search FS dash 2009 dash 8.
[Glenn] Anita, here's another one for you.
It reads, "Where can I go to locate a record storage firm?"
[Anita] That's really outside the IRS's realm, but it is a great question.
You can use a search engine such as Google to search using the words "record storage companies" for a listing of firms that provide off-site storage services.
[Glenn] Thank you, Anita.
Tom, "Do state departments of revenue also provide disaster tax relief for state tax filings?"
[Tom] States can provide disaster relief for state tax filings.
It is their decision whether or not to do so.
[Glenn] Well I think we have time for just one more question and this is a good one for Tom.
The question is, "How can I volunteer to provide some tax assistance to disaster victims?"
[Tom] The IRS has entered into Memorandums of Understanding with several national practitioner organizations that allow for interested state chapters to provide volunteer members to assist taxpayers at FEMA disaster recovery centers.
The IRS will only call upon these volunteers in situations where available IRS resources are not adequate to provide service to the victims.
If you are affiliated with a state chapter of a national practitioner organization, and are interested in the volunteer program, please contact your organization to see if it has agreed to participate in the program.
If it has, you will be provided with additional information on program operations.
[Glenn] Thank you, Tom.
And thank you to our three presenters.
Participants, we hope you have enjoyed today's presentation and invite you to join us for future events.
Visit our Web site, irs.gov and type 'phone forums and webinars' in the Search box.
On behalf of the IRS, this is Glenn Gizzi, thanking you for being with us, and enjoy your day.