Iowa Residents May Qualify for IRS Disaster Relief
Release Date: July 10, 2008
Release Number: 1763-079
» More Information on Iowa Severe Storms, Tornadoes, and Flooding
DES MOINES, Iowa -- Disaster tax relief may be available to Iowa residents who suffered losses in the severe storms, tornadoes and flooding beginning May 25, according to state and federal officials.
Casualty Losses
Affected taxpayers in a presidentially declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year's return could result in a greater tax saving, depending on other income factors.
Individuals may deduct personal property losses that are not covered by insurance or other reimbursements, but they must first subtract $100 for each casualty event and then subtract 10 percent of their adjusted gross income from their total casualty losses for the year. For details on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts.
Affected taxpayers claiming the disaster loss on last year's return should put the disaster designation "Iowa/Severe Storms, Tornadoes and Flooding" at the top of the form so that the IRS can expedite the processing of the refund.
Available to help people with the process of deducting their storm-related losses are Internal Revenue Service (IRS) Publication 2194, Disaster Loss Kit for Individuals, and Publication 2194-B, Disaster Loss Kit for Businesses. If the taxpayer's 2007 federal income tax return has already been filed, a copy of that return will be helpful, and perhaps necessary. If such a copy is unavailable, a copy can be obtained from the IRS by calling the IRS Disaster Assistance Hotline - 1-866-562-5227 (Monday - Friday from 7 a.m. to 10 p.m. CST). Calling this number also will result in expedited assistance specifically for taxpayers impacted by disaster.
Filing Deadlines
The IRS is postponing until July 28 certain deadlines for taxpayers who reside or have a business in the disaster area qualifying for individual assistance. The postponement applies to return filing, tax payment and certain other time-sensitive acts otherwise due between May 25 and July 28. In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after May 25 and on or before June 9, as long as the deposits were made by June 9.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, from May 25 to July 28.
IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request tax relief.
Other Relief
The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers who need them to apply for benefits or to file amended returns claiming casualty losses. Such taxpayers should put the assigned disaster designation 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 submit it to the IRS.
Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.
For assistance and additional information, affected taxpayers can obtain the IRS fact sheet (IRS publication 3067) from most state/federal Disaster Recovery Centers; call the IRS Disaster Assistance Hotline; visit the IRS Web site, www.irs.gov; or contact their tax professional.
Taxpayers may download forms and publications from the official IRS Web site, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.
FEMA coordinates the Federal government's role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terrorism.
Last Modified: Monday, 14-Jul-2008 16:58:36