Washington (Sept. 25, 2003) -- The Internal Revenue Service is providing special tax relief for residents in the Presidential Disaster Areas that were struck by Hurricane Isabel.

This relief applies in the District of Columbia and parts of Delaware, Maryland, North Carolina and Virginia. The relief gives affected individual and business taxpayers additional time to file and pay certain taxes, and it provides affected employers extra time to make federal tax deposits.

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 the Presidential disaster area.

The IRS gives affected taxpayers until the Extension Date to file tax returns or make tax payments that have either an original or extended due date falling within the Designated 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 Extension Date is Nov. 18, 2003, except for Federal Tax Deposits, for which the extension date is September 29.

This extension to file and pay does not apply to information returns (other than Form 5500 series), or employment and excise tax deposits; however, penalties on deposits due during this period may be abated based on reasonable cause, as long as the tax deposit is made by Sept. 29, 2003.

To qualify for this relief, affected taxpayers should put the Disaster Designation assigned for their area 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.

-- WebCPA staff

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