BY MEGAN BROOMFIELD
BridgeTower Media Newswires
In light of Hurricane Florence, I wanted to point out some important information released by the Internal Revenue Service this week—as well as some unfortunate reminders that there are scammers out there looking to take advantage in these situations. I also wanted to keep top-of-mind some tips to be ready in case you live or own a business in an area susceptible to natural disasters such as hurricanes.
IRS extends deadlines, provides tax relief
Hurricane Florence victims in specified affected areas have until Jan. 31, 2019 to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced this week.
The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance. Currently, this only includes parts of North Carolina, but taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 7. As a result, affected individuals and businesses will have until Jan. 31, 2019 to file returns and pay any taxes that were originally due during this period.
This includes quarterly estimated income tax payments that were due on Sept. 17 and the quarterly payroll and excise tax returns normally due on Oct. 31. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2017 extensions ran out on Sept. 17. Taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15 will also have more time to file.
In addition, penalties on payroll and excise tax deposits due on or after Sept. 7 and before Sept. 24 will be abated as long as the deposits were made by Sept. 24.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2018 return normally filed next year), or the return for the prior year (2017). See IRS Publication 547 for details.
Be aware of scammers
In the wake of Hurricane Florence, the Internal Revenue Service is reminding taxpayers that criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters. Fraudulent schemes normally start with unsolicited contact by telephone, social media, email, or in person, with a variety of tactics.
Some impersonate charities to get money or private information from well-intentioned taxpayers. Bogus websites often use names similar to legitimate charities to trick people into sending money or providing personal financial information. They even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds.
Others scammers operate bogus charities and solicit money or financial information by telephone or email.
Be ready if a disaster ever strikes
Because a natural disaster can strike any time, it is important that we remind ourselves to take time now and create or update our emergency preparedness plan.
Individuals, families and businesses should be ready for a disaster with a preparedness plan that includes key documents, lists of belongings and property.
Original documents, including bank statements, tax returns, deeds, titles and insurance policies, should be kept in a safe place in waterproof containers. A duplicate set of key documents should be kept with a family member or trusted friend outside the area the disaster may affect. Rather than copy paper documents, scanning them for backup storage on a hard drive, flash drive, CD or DVD takes less space. Many financial institutions provide statements and documents electronically.
Photographs or videos of the contents of any home or business, especially high-value items, can help support claims for any available insurance or tax benefits should a disaster strike. The IRS has a Casualty, Disaster, and Theft Loss Workbook for both individuals and businesses that can help people compile lists of belongings or business equipment. (Publication 584 and 584-B, respectively.) Images may fit on the same storage device as electronic documents.
Megan Broomfield is a CPA in Rochester, New York.