Victims of the severe storms, tornadoes and flooding that took place on February 10 in parts of Mississippi may qualify for tax relief.
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President Obama has declared Forrest and Lamar Counties a federal disaster area, and individuals who reside or have a business in these counties may qualify for tax relief from the IRS, which can postpone certain deadlines for taxpayers.
Certain deadlines falling on or after February 10 and on or before April 30, for instance, have been postponed to April 30, 2013. This includes the April 15 deadline for filing 2012 individual returns, making income tax payments and making 2012 contributions to an IRA. The IRS is also waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after February 10 and on or before February 27, as long as the deposits are made by Feb. 27, 2013.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the 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 that falls within the postponement period.
The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief, but affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at (866) 562-5227 to request this relief.
Affected taxpayers in a federally declared disaster area also have the option of claiming disaster-related casualty losses on their federal 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. Details are on Form 4684 and its instructions.
The IRS will also waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned “Disaster Designation” in red ink at the top of Form 4506 or 4506-T.
The IRS number for general tax questions is (800) 829-1040.