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Flood Information Announcement

The Internal Revenue Service is providing relief for people and businesses located in various areas of the country that have suffered damage from Hurricane Irene

IRS Irene Relief Website

The IRS has announced that victims of Hurricane Irene in certain areas in Connecticut, New Jersey, New York, Massachusetts, North Carolina and Vermont have qualified for tax relief. The following is a brief summary of tax relief provided by the IRS:

Extended deadlines to file and to pay taxes

Affected taxpayers have been granted additional time to make tax payments and file returns.

Affected taxpayers include:

  • Any individual whose principal residence is located in a designated disaster area as listed below.
  • Any business whose principal place of business is located in a designated disaster area as listed below.
  • Any individual who is a relief worker assisting in a disaster area (NOTE: The relief worker does not need to be affiliated with recognized government or philanthropic organizations.)
  • Any individual, business entity, estate or trust that has records located in a disaster area necessary to meet a filing or payment deadline (even if the residence or place of business is not located in a disaster area).

The IRS allows for postponement of the following:

  • The filing of most tax returns including individual, partnership, C corporation, S corporation, employee benefit plan, estate, trust, gift, and generation-skipping transfer tax returns, and employment and certain excise tax returns.
  • Tax payments, including estimated tax payments that have either an original or extended due date falling on or after the date of the disaster and on or before the extended relief date provided by the IRS (see below for listing of qualifying areas and dates by state).

Postponement of time to file and pay does not include the following:

  • Informational returns in W-2, 1098, 1099 or 5498 series, and Forms 1042-S or 8027.
  • Employment and excise tax deposits.

The following is a listing of affected areas by state that qualify as federal disaster areas, along with dates for disasters and relief extensions:

Connecticut
Date of disaster: August 27, 2011
Date of relief extension: October 31, 2011
Qualifying counties and municipalities: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland, and Windham.

New Jersey
Date of disaster: August 27, 2011
Date of relief extension: October 31, 2011
Qualifying counties and municipalities: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren.

New York
Date of disaster: August 26, 2011
Date of relief extension: October 31, 2011
Qualifying counties and municipalities: Albany, Clinton, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Otsego, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Sullivan, Suffolk, Ulster, Warren and Westchester.

Massachusetts
Date of disaster: August 27, 2011
Date of relief extension: October 31, 2011
Qualifying counties and municipalities: Berkshire and Franklin.

North Carolina
Date of disaster: August 25, 2011
Date of relief extension: October 31, 2011
Qualifying counties and municipalities: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Greene, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington and Wilson.

Vermont
Date of disaster: August 29, 2011
Date of relief extension: October 31, 2011
Qualifying counties and municipalities: Addison, Bennington, Caledonia, Chittenden, Orange, Rutland, Washington and Windsor.

Casualty Losses Sustained in Disaster Areas
Property damage losses may be eligible for a tax deduction as a casualty loss. Casualty losses can be deducted only after insurance claims have been filed and the amount of insurance reimbursement is known. Any unreimbursed losses can then be deducted on the tax return using Form 4684 – Casualties and Thefts.

Under a special rule for losses in federally declared disaster areas, in the case of casualty losses sustained from Hurricane Irene in the designated disaster areas above, the taxpayers can elect to either deduct the loss on their 2011 tax return, or on their 2010 tax return. Thus it may be possible for affected taxpayers to take a casualty loss deduction on their original or amended 2010 tax return, thereby getting any tax refund money more quickly than deducting the loss on their 2011 tax return.

If the taxpayer has yet to file an extended tax return for 2010, the taxpayer can claim this deduction with the filing of the original return by the extended due date. However, in the case of a 2010 tax return that has already been filed, the taxpayer can amend the return to include a casualty loss deduction and file that return by the original due date for a 2011 tax return filing. In the case of a calendar year individual taxpayer, the amended 2010 tax return must be filed by April 15, 2012 to claim the casualty loss deduction.

Fee Waivers
Taxpayers located in federally declared disaster areas can receive copies of their previously filed tax returns at no cost. Copies of tax returns can be obtained by submitting Form 4506.

IRS Irene Relief Website

For questions or more information regarding tax relief for Hurricane Irene victims, please contact Herbein + Company, Inc at 610-378-1175 and ask for Barry Groebel.

Written by: James E. Montone, Barry D. Groebel, CPA, Stacy A. Weller, CPA