July 18, 2002

BURLINGTON -- The President recently signed a disaster declaration for the State of Vermont resulting from the flooding that occurred over the period of June 5-13, 2002. When the counties of Caledonia, Franklin, Lamoille and Orleans were designated as federal disaster areas, this action then allowed the Internal Revenue Service (IRS) to offer some special tax relief.

Affected taxpayers whose estimated payments were due on June 15, 2002, must pay by July 31, 2002, to avoid penalties. Taxpayers that make such a payment after June 15, 2002, will need to file Form 2210 (Individuals) or Form 2220 (Corporations) indicating they are seeking a waiver from the Estimated Tax Penalty. The Form 2210/2220 should be marked “Vermont Flood – June 2002” across the top of the form.

Taxpayers who are unable to timely file or pay any Federal Income Tax Return with an original due date falling between June 5, 2002 and July 13, 2002, may ask the IRS to waive any penalty asserted for late filing or payment of tax due to reasonable cause. Any such request should reference the disaster declaration by marking at the top of the return “Vermont Flood – June 2002.”

“If you had property damaged or lost in an area the President declared eligible for federal disaster assistance, you may be able to get a tax refund, due to your unreimbursed loss, from our agency right now,” said IRS spokesperson Peggy Riley.

Unreimbursed losses are generally deductible on the tax return in the year the casualty occurred. Taxpayers who have not yet filed a 2001 tax return can claim the unreimbursed disaster loss on that return. Form 4684, "Casualties and Thefts," must be attached to show how the loss was figured. Those who have already filed can amend their return by filing a Form 1040X, "Amended U.S. Individual Tax Return." Taxpayers may also wait until they file the 2002 tax return to claim the disaster loss. The IRS advises taxpayers to print “Vermont Flood – June 2002” on the top of the tax return.

If important tax documents were lost or destroyed, taxpayers may get a copy of prior year Form 1040, 1040A, or 1040EZ, free of charge by sending a completed Form 4506, "Request for Copy or Transcript of Tax Form," to the IRS Center where they filed their last tax return. The IRS advises taxpayers to print “Vermont Flood – June 2002” on the top of the Form 4506.

“It’s important for persons who suffer personal property damage to document the extent of the damage after the disaster. Photographs and detailed inventories are very helpful,” noted Riley.

Taxpayers can visit a local IRS office for assistance with filing a claim. 

For more information about disaster relief and claiming casualty losses, see IRS Publication 547, "Casualties, Disasters, and Thefts," or call IRS tax assistance at 1-800-TAX-1040 (1-800-829-1040).