It appears the IRS is cutting the victims of the California wildfires some slack as they now have until January 31, 2018, to file certain individual and business tax returns and payments (IR-2017-172, 10/13/17).
Notably, the IRS announcement includes additional extensions for taxpayers who would have been required to file their returns by October 16. (The normal deadline was pushed back from October 15th because it’s a Sunday.)
As of October 13th, wildfires in California had torn through more than 5,700 homes, businesses and other properties, as well as 190,000 acres of land. And we’re not even out of the woods yet as the numbers mount each day.
According to the release, the IRS is currently providing relief to seven California counties: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. Individuals and businesses in these localities, as well as firefighters and first responders who live elsewhere, qualify for the extension. The nation’s tax collection agency will continue to closely monitor developments and may offer additional relief in other locations.
The IRS is postponing various tax filing and payment deadlines that occurred starting on October 8, 2017. As a result, affected individuals and businesses now have until January 31, 2018, to file returns and pay any taxes originally due during this period. This includes the January 16, 2018 deadline for making quarterly estimated tax payments.
For individual tax filers, it also includes 2016 income tax returns that benefitted from a tax-filing extension until October 16, 2017. However, the IRS noted that payments relating to 2016 tax returns aren’t eligible for this relief. The initial extension was for filing tax returns – not payment to the IRS.
Various business tax deadlines are also affected, including the October 31 deadline for quarterly payroll and excise tax returns. Calendar-year tax-exempt organizations whose 2016 extensions run out on November 15, 2017 have also been granted extra time.
In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due after October 8 and before October 23, as long as the deposits are made by October 23, 2017.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers don’t have to 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
More details about tax filing relief for federal disaster-area victims are available at the disaster relief page on www.irs.gov. Advise clients to visit this site and then consult with you for further guidance, when needed.