Well Hurricane Sandy left behind countless fallen trees and power lines. There were stories of tragedy and survival, of people who lost everything when the water rushed in, of buildings that crumbled after being pounded hour after hour by rain and relentless wind, of hospitals that had to be evacuated when the storm knocked out the electricity. Scores of damages happened to both property and people.
What might we expect in response to Hurricane Sandy from the Internal Revenue Service?
- Possible extensions for Payments Due: Those hit by natural disasters will typically be afforded an extension for payments and deposits due, which would include: excise tax payments, payroll tax deposits and business and personal tax estimate payments.
- Installment Plan Deferment: if you are under a tax installment payment plan, you can likely expect an extension on your time to pay by a minimum of two weeks, but with the extent of this storm, it could potentially be even longer.
- Penalty and Interest Abatements: Your penalties may be able to be forgiven. Often, the IRS will not know you’re in a disaster area, but they recommend you go ahead and take the extension offered. If you then receive a penalty notice, they advise you to call the number on the penalty and interest letter and let them know you’re in a declared disaster area and they should forgive any penalties and interest associated with late filing or payments. Our firm helps individuals and businesses abate penalties for reasonable cause criteria. If you were adversely affected by Hurricane Sandy, you should be able to utilize this “reasonable cause criteria” to abate penalties.
- Free Copies of Documents: If your records were destroyed by Hurricane Sandy, you can contact the IRS for free copies of back tax returns. They’ll waive their standard fees and will expedite your request at no charge to help you rebuild your financial records quickly. You would need to file a form 4506 and remember to list the disaster (“Hurricane Sandy”) in red at the top of the form.