California wildfire victims qualify for tax relief

Victims of wildfires and high winds that began July 23 in California may qualify for tax relief from the Internal Revenue Service.

Following the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS said affected taxpayers who reside or have a business in Shasta County may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after July 23 and before Nov. 30 are granted additional time to file through Nov. 30. This includes taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15.

It also includes the quarterly estimated income tax payments due on Sept. 17 and the quarterly payroll and excise tax returns normally due on July 31 and Oct. 31. It also includes tax-exempt organizations that operate on a calendar-year basis and had an automatic extension due to run out on Nov. 15.

Smoke from wildfires in California in the summer of 2018
Smoke from wildfires rise above Napa, California, U.S. Photographer: David Paul Morris/Bloomberg

In addition, penalties on payroll and excise tax deposits due on or after July 23 and before Aug. 7 will be abated as long as the deposits were made by Aug. 7.

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.

The IRS automatically identifies taxpayers in the covered disaster area and applies automatic filing and payment relief. Affected taxpayers who reside or have a business outside the covered disaster area must call the IRS disaster hotline at (866) 562-5227 to request this relief.

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