OK-2003-12, May 15, 2003
(updated 5/23/03 to include 10 counties added to the disaster area)
(updated 6/4/03 to add 6 counties and to give an ending date for the disaster period)

OKLAHOMA CITY – The Internal Revenue Service today announced special tax relief for Oklahoma residents in the 25-county Presidential Disaster Area struck by severe storms and tornadoes beginning May 8 and ending May 30, 2003. 

That relief includes certain tax filing and payment extensions, interest and penalty abatement, as well as potential disaster-loss tax refunds. 

IRS employees are available at three metro-Oklahoma City FEMA Disaster Recovery Centers in Bethany, Midwest City and Moore to help taxpayers get free information about special tax benefits.  Taxpayers can also make appointments to get free assistance from an IRS specialist with the filing of a special amended tax return, which could result in a tax refund within a few weeks.

The disaster area to which these tax-related benefits apply includes the counties of Canadian, Carter, Cherokee, Cleveland, Creek, Delaware, Garvin, Grady, Kay, Kingfisher, Lincoln, Logan, McClain, Muskogee, Nowata, Okfuskee, Okmulgee, Osage, Oklahoma, Pontotoc, Pottawatomie, Roger Mills, Seminole, Texas and Washington Counties.

For the purposes of this tax relief, affected taxpayers include individuals and businesses located in the disaster area, those whose tax records are located in the disaster area, and relief workers. The same relief will also apply to any counties added to this disaster area.

The IRS is granting affected taxpayers an extension of time to July 18 to file tax returns or make tax payments that have either an original or extended due date falling from May 8 through July 18, 2003. The IRS will abate interest and any late filing or late payment penalties that would apply during these dates to returns or payments subject to these extensions.

The IRS is giving affected taxpayers until July 18 to perform certain other time-sensitive actions described in Treasury Regulation § 301.7508A-1(c)(1) and Rev. Proc. 2002-71, 2002-46 I.R.B. 850, that are due to be performed during the period May 8 through July 18, 2003. This relief includes the filing of Form 5500 series returns (tax returns of pension and welfare benefit plans), in the manner described in section 8 of Rev. Proc. 2002-71.

This extension to file and pay does not apply to information returns, or to employment and excise tax deposits. However, the IRS will abate penalties on payroll tax deposits during this period for affected taxpayers due to reasonable cause.

To qualify for this relief, affected taxpayers should put “May Storms/Tornadoes – OK” in red ink at the top of the return, except for Form 5500, where filers should check Box D in Part 1 and attach a statement, following the form’s instructions. Individuals or businesses located in the disaster area – or taxpayers outside the area that were directly affected by these storms – should contact the IRS if they receive penalties for filing returns or paying taxes late.

Affected taxpayers have the option of claiming disaster-related casualty losses on either their 2002 or 2003 federal income tax returns. Claiming the loss on an original or amended 2002 return will get the taxpayer an earlier refund, but waiting to claim the loss on the 2003 return could result in a greater tax saving, depending on other income factors. 

Taxpayers in the declared counties may call the IRS Oklahoma City office at (405) 297-4737 to set up an appointment for free assistance from an IRS specialist with the filing of a disaster-loss amended tax return.  Filing such an amended return could result in a tax refund within a few weeks.

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 ten 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.

IRS Publication 584, Casualty, Disaster, and Theft Loss Workbook, is another helpful publication.   It contains room-by-room worksheets to guide a taxpayer in the determination of the value for tax purposes of personal-use property damaged or destroyed.  It also contains a worksheet for vehicles.

Affected taxpayers claiming the disaster loss on a 2002 return should put the words “May Storms/Tornadoes – OK” in red ink at the top of the form so that the IRS can expedite the processing of the refund.

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 “May Storms/Tornadoes – OK” in red ink at the top of Form 4506, Request for Copy or Transcript of Tax Form, 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.

The IRS toll-free number for general tax questions is 1-800-829-1040.