The American Institute of CPAs has sent a set of proposals outlining its recommendations for permanent tax provisions related to disaster relief.
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1. Waive individual casualty loss limitations;
2. Extend net operating loss carryback to five years;
3. Increase section 179 expense limits;
4. Increase property replacement period to five years;
5. Waive the penalty for early retirement withdrawal;
6. Allow a housing exemption for displaced individuals;
7. Allow discharge of indebtedness;
8. Allow the work opportunity tax credit;
9. Permit the use of prior year's income to calculate the earned income tax credit, child tax credit, and premium tax credit; and
10. Increase the medical expense deduction.
“The AICPA urges Congress to enact tax legislation that permanently provides meaningful and timely relief that is automatically triggered by a declaration of a federal disaster rather than providing for such relief via individual bills following a disaster,” AICPA Tax Executive Committee chair Troy Lewis wrote in the letter. “Permanent relief will provide disaster victims with certainty, fairness, and the ability to promptly receive the aid they need after a natural disaster, while reducing the administrative burdens on disaster victims and the IRS.”