Hurricane Katrina: General Assistance

Those affected by Hurricane Katrina may call the IRS at (866) 562-5227, MF, from 7 am to 10 pm, local time, for assistance (7 am to 10 pm PST if in Alaska or Hawaii).

In addition, the Service, the AICPA, the National Association of Enrolled Agents and the American Association of Attorney-Certified Public Accountants will assist individuals with tax issues at local disaster recovery centers established by the Federal Emergency Management Agency (FEMA).

General Extensions

According to IR-2005-112, taxpayers affected by Hurricane Katrina have until Feb. 28, 2006 to do the following; see also Katrina Emergency Tax Relief Act of 2005 Section 403(b) and JCX-69-05 (9/22/05), p. 31:

• File Federal income, estate, gift or employment tax returns due after Aug. 28, 2005 (Aug. 23, 2005 for Florida taxpayers), either originally or under an extension.

• Pay Federal income, estate, gift, employment or excise taxes that were due after Aug. 28, 2005 (Aug. 23, 2005 for Florida taxpayers), either originally or under an extension.

• Make any income, employment or excise tax deposits that were due after Aug. 29, 2005 (Aug. 23, 2005 for Florida taxpayers), either originally or under an extension.

As long as returns or payments are made by that date, taxpayers will not have to pay interest or penalties otherwise due from Aug. 29, 2005 (Aug. 23, 2005 for Florida taxpayers) to Feb. 28, 2006.

Note: Although businesses affected by Hurricane Katrina have until Feb. 28, 2006 to make employment tax deposits due after Aug. 28, 2005 (Aug. 23, 2005 for Florida taxpayers), the IRS encourages businesses that can make those deposits earlier to do so. Early deposits also protect businesses from the 100% penalty that may apply to deposits made after the Feb. 28, 2006 deadline.

Who Is Affected?

Taxpayers are affected by Hurricane Katrina if one of the following applies:

• Their homes or businesses are (or were) located in any of the parishes or counties that President Bush declared as disaster areas; see Exhibit 3.

• Their homes or businesses are located elsewhere, but their books or records were located in the Hurricane Katrina disaster area.

• Their homes or businesses are located elsewhere, but their tax advisers were located in the Hurricane Katrina disaster area.

• They are relief workers assisting in the Hurricane Katrina disaster area, whether or not affiliated with a recognized government or philanthropic organization.

• Their trusts or estates have tax records in the Hurricane Katrina disaster area.

• Their spouses, with whom they are filing a joint Federal income tax return, were affected by Hurricane Katrina.

• They were injured by the hurricane or its aftermath while visiting the Hurricane Katrina disaster area. This also applies to the estate of an individual killed while visiting the Hurricane Katrina disaster area.

Note: A home refers to a principal residence, whether owned or rented (e.g., it does not include a vacation home). A business refers to a principal place of business (e.g., where most of a taxpayers business is conducted).

How to File

If taxpayers homes or businesses are (or were) located in an area designated by the FEMA as warranting individual assistance (a FEMA-designated individual assistance area; see Exhibit 1), they simply need to file their returns by the Feb. 28, 2006 deadline; they do not need to identify themselves as eligible for Hurricane Katrina-related tax relief. If they wish to be cautious, however, they should write HURRICANE KATRINA in red ink on their tax forms.

If taxpayers homes or businesses are (or were) located in an area that FEMA-designated only for public assistance (see Exhibit 2) or they are otherwise considered affected by Hurricane Katrina (see definition under Who Is Affected? above, excluding the first item), they must write HURRICANE KATRINA in red ink on the top of their tax forms.

Taxpayers with questions can call the IRS at 866-562-5227.

Suspension of IRS Collection Activities

If taxpayers or their businesses were affected by Hurricane Katrina (as defined above), the IRS will not do any of the following until after Feb. 28, 2006:

• Collect any taxes coming due after Hurricane Katrina.

• Issue liens against property to collect taxes owed before Hurricane Katrina.

• Garnish wages to collect taxes owed before Hurricane Katrina.

If the Service does contact taxpayers before March 1, 2006 about one of the items listed above, taxpayers should identify themselves as affected by Hurricane Katrina.

Requesting Copies of Tax Returns

The IRS will waive the usual copying fees and expedite requests if taxpayers or their businesses were affected by Hurricane Katrina and need copies of previously filed returns (e.g., to apply for loans or amend their 2004 tax returns). To request copies, they should write HURRICANE KATRINA in red ink at the top of Form 4506, Request for Copy of Tax Return or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and send it to the Service.

From Linda Gurene, San Antonio, TX