Arkansas taxpayers who were victims of severe storms, tornadoes, straight-line winds and flooding that began two months ago may qualify for tax relief from the IRS.

President Obama has declared the Arkansas counties of Crawford, Garland, Howard, Jefferson, Little River, Miller, Perry, Sebastian and Sevier a federal disaster area. Individuals who reside or have a business in these counties 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 May 7 and on or before Aug. 31 have been postponed to Aug. 31. This includes the May 15 deadline for many tax-exempt organizations to file their annual Form 990 and the June 15 deadline for making quarterly estimated tax payments.

A variety of business tax deadlines are also affected, including the July 31 deadline for quarterly payroll and excise tax returns. The IRS is also waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after May 7 as long as the deposits were made by May 22.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone 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 tax relief.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after May 7 and on or before May 22 provided the taxpayer made those deposits by May 22, 2015.

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year.

The IRS will 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, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, 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 official IRS Web site, or order them by calling (800) 829-3676. The IRS toll-free number for general tax questions is (800) 829-1040.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access