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IRS Grants Tax Relief for Victims of California
Wildfires
October 28, 2003
WASHINGTON — The Internal Revenue Service today announced special
tax relief for Southern California residents in the Presidential
Disaster Area that was struck by wildfires beginning Oct. 21, 2003.
The disaster area counties are: Los Angeles, San Bernardino, San
Diego and Ventura.
• The FTD Penalty Waiver Period for employment and excise tax
deposits is Oct. 21 - Nov. 7, 2003.
• The Extension Period for returns and other tax payments is Oct. 21
through Dec. 29, 2003.
• The Disaster Designation for this area is “CA Wildfires” –
taxpayers mark certain relief-related forms with this designation.
Affected Taxpayers
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 places added to the disaster
area.
Extensions to File or Pay Taxes
The IRS gives affected taxpayers until the last day of the Extension
Period to file tax returns or make tax payments, including estimated
tax payments, that have either an original or extended due date
falling within this Period. 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 also gives affected taxpayers until the last day of the
Extension Period 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
this Period. This relief includes the filing of Form 5500 series
returns, 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
may abate penalties on such deposits for affected taxpayers due to
reasonable cause during the FTD Penalty Waiver Period, provided they
make the payment by the last day of that Period.
To qualify for this relief, affected taxpayers should put the
assigned Disaster Designation 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 this disaster – should
contact the IRS if they receive penalties for filing returns or
paying taxes late.
Casualty Losses
Affected taxpayers in a Presidential 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 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.”
Affected taxpayers claiming the disaster loss on a last year’s
return should put the Disaster Designation in red ink at the top of
the form so that the IRS can expedite the processing of the refund.
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 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.
Taxpayers may download forms and publications from the IRS Web site
at www.irs.gov or may 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.
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