Wildfire & Derecho Tax Relief from IRS

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The IRS is providing tax relief to victims devasted by a recent derecho in Iowa and multiple wildfires in California.  In Issue IR-2020-190, victims of the August 10th derecho in Iowa are extended payment and tax reporting relief, and in Issue IR-2020-191, victims of California wildfires that started on August 14th are extended relief as well.   Various individual and business tax returns, payments, and quarterly income tax payments due on either September 15th or October 15th have been postponed to December 15, 2020 to eligible individuals and businesses.         

The Federal Emergency Management Agency (“FEMA”) has approved and recognized the following list of qualified localities at the time that notices were issued:  Linn County in Iowa and Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma, and Yolo counties in California.  FEMA maintains and updates lists as needed. Anyone on these specific FEMA lists will automatically receive the same extension relief. Please visit and refer to the IRS.gov disaster relief page for or additional returns, payments, and other tax related information not mentioned here.  

Important extension information is listed below:

  • Payments that were due on July 15th for 2019 tax returns are not eligible for this relief. 
  • For Iowa taxpayers, penalties on payroll and excise tax deposits due after August 10th but before August 25th will be abated as long as deposits are made by the August 25th deadline.  
  • For California taxpayers, penalties on payroll and excise tax deposits due after August 14th but before August 31st will be abated as long as deposits are made by the August 31st deadline.

Tax filing and penalty relief is available to all taxpayers and is part of a coordinated federal response effort related to damage caused by devastating storms or wildfires in Iowa and California.  The IRS is willing to work with any taxpayer who is affected but lives outside of the area, including government workers and those in philanthropic organizations. Contact the IRS at 866-562-5227 or visit disasterassistance.gov.  

Those individuals and businesses in federally declared disaster areas who have suffered losses due to either being uninsured or unreimbursed can choose to claim losses on either the tax return for the year that the loss incurred or the prior year’s tax return.  The IRS reminds all correspondence that pertains to returns claiming losses to include the appropriate FEMA declaration number.  See Publication 547 for details.

  • 4557 for Iowa
  • 4558 for California

The IRS is automatically providing filing and penalty relief to all taxpayers with an IRS address of record located in affected disaster areas.  There is no need for taxpayers to contact the IRS to receive relief.  Should a taxpayer receive a late tax filing or late payment penalty notice from the IRS, with original or extended filing, payment or deposit dates falling within the postponed period, the taxpayer should contact the IRS by calling the number on the notice to seek abatement. Additionally,  taxpayers living outside eligible areas should work with the IRS by contacting the IRS at 866-562-5227 if records needed are located in an affected area.    

SPS/GZ is a full-service tax reporting firm that provides personalized service and exceptional support, utilizing state-of-the-art technology to create and e-file Forms 1099, Affordable Care Act tax forms, and Forms 3921 and 3922.  Reach out today at [email protected] or call at (888)375-3049.  Our solution allows companies to simply upload their 1099 data file to our secure portal in a few easy steps and we handle everything else.

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