FAQs for Hurricane Victims - Filing Extensions
(8/25/06) Q: For those eligible for relief under Notice 2006-20, what is the due date of 2005 tax returns? Can an extension to file still be requested?
A: Notice 2006-20 postponed the 2005 Form 1040 due date from April 17, 2006 to August 28, 2006. However, on August 25, 2006, IRS issued News Release 2006-135, providing an additional postponement to October 16, 2006. If more time is needed to file, then Form 4868 must be filed by October 16, 2006 for an automatic additional six months.
Likewise, for calendar year corporations, the 2005 Form 1120 due date has been postponed from March 15, 2006, until October 16, 2006. If more time is needed to file, Form 7004 may be filed by October 16, 2006, for an automatic additional six- month extension.
(8/25/06) Q: If an eligible taxpayer owes money, is it okay to file electronically in April or May and not make the payment until August 28, 2006?
A: Yes. The return may be filed early and the payment is still not due until the postponed due date which has now been postponed to October 16, 2006, for the seven Louisiana parishes or three Mississippi counties that were listed in Notice 2006-20 (PDF), or for those taxpayers who self-identify.
(8/25/06) Q: Does the extension to August 28, 2006, include the clients of tax professionals who are located in one of the covered disaster areas that are required to self identify for the additional extension, even if the client is not in a covered disaster area?
A: Yes. On August 25, 2006, the IRS announced that filing and payment deadlines have been postponed to October 16, 2006. The postponement applies to taxpayers whose tax professional or practitioner is located in any of the covered disaster areas, either through automatic postponements or by self-identifying. Refer to Notice 2005-73 (PDF).
(1/27/07) Q: We filed corporate extensions on March 15th. Does this preclude us from the additional six-month extension?
A: Extensions received for corporate returns due on March 15, 2006, that are marked with “Hurricane Katrina” in red ink on the top of the form, will be allowed the additional six-month extension to April 17, 2007.
(4/11/07) Q: How do you self-identify on an electronically filed return?
A: IRS computer systems now automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Taxpayers within the covered disaster area no longer need to self-identify by writing on their returns or using the disaster designation in their tax software. Affected taxpayers who reside or have a business located outside the covered disaster area will be required to call the IRS toll free number, (866) 562-5227, to self-identify for disaster relief.
(4/21/06) Q: If a taxpayer lives outside the parishes/counties designated for automatic relief and outside the self-identify areas, but has a second home or rental property within the affected areas, would they qualify for the relief in Notice 2006-20?
A: The authority for definition of affected taxpayers is 301.7508A(1)(d)(1) which states that “affected taxpayers” eligible for the relief include any individual whose principal residence is in a covered disaster area. A second home or rental property would not qualify for the postponed deadline of August 28, 2006. However, a business entity with a principal place of business in the covered disaster area would be eligible.
(8/25/06) Q: Headliner 153 indicates that clients of tax professionals located in the designated areas will be able to claim relief from filing until August 28. The headliner refers to Notice 2005-73. That notice indicates that the designated areas include Jackson. Therefore, can we claim an automatic extension of time to file for all our clients since we have been impacted by the hurricane, but are not in one of the three Mississippi counties?
A: The authority for the extension until August 28, 2006, is Notice 2006-20. Affected taxpayers located in Jackson, Miss., who need additional time to comply with filing and payment deadlines must self identify for the postponement to August 28, 2006. The reference to Notice 2005-73 in Headliner 153 was intended to provide a reference to the definition of "affected taxpayers." However, Notice 2006-135 further postpones the filing and payment deadline to October 16, 2006.
(1/27/07) Q: Do we file extensions prior to April 17 with Hurricane Katrina in red on top but without payments? If so, should they reflect only (0) amounts rather than actual amounts? Do we file extensions at all or do we wait until August 28 to file an extension? If we are to file by August 28, then does that extend the due date to February 28, 2007?
A: Filing and payment deadlines have been postponed until October 16, 2006. This includes the filing of Form 4868, Automatic Extension of Time to File U S Individual Income Tax Return. You can self identify by calling the (866) 562-5227 or you may submit Form 4868 no later than October 16, 2006. The Form 4868 should be labeled at the top of the form in red "Hurricane Katrina." Forms 4868 received on or before October 16, 2006, will be granted an automatic 6-month extension of time to April 17, 2007. The Form 4868 should be completed to the best of your ability, including your estimate of the tax liability. You are not required to pay the estimated amount of tax due; however, the payment of taxes due is postponed to October 16, 2006. Any underpayment of tax will be subject to penalty and interest beginning October 17, 2006, until the tax is paid in full.
(8/25/06) Q: When should the RED Hurricane Katrina designation be used? On all clients’ returns or only those clients who claim a casualty loss?
A: Any affected taxpayer who needs additional time to file returns or make payments that were due from August 29, 2005, through and including October 16, 2006, may be granted a postponement until October 16, 2006. All requests should be clearly marked "Hurricane Katrina" in red at the top of the form. Taxpayers may also self identify by calling (866) 562-5227. Also, any written request for expedited service or other consideration as a result of this disaster should be clearly marked in red "Hurricane Katrina."
(1/27/07) Q: If a corporation filed a regular extension by March 15 but did not self identify and later determines they need longer than September 15, 2006, to file, can they file a second extension by August 28, 2006, and self identify and get an additional six-month extension?
A: If a regular extension has already been filed but did not contain the "Hurricane Katrina" disaster designation at the top of the form, then another Form 7004, clearly marked "Hurricane Katrina" in red at the top of the form, should be filed no later than October 16, 2006, in order to get the additional extension to April 17, 2007.
(8/25/06) Q: Does Notice 2006-20 cover all persons receiving K-1s?
A: The flow through entities would qualify as "affected taxpayers" whose due date for filing was extended to October 16, 2006, for Hurricane Katrina. The partners, LLC members, etc. who own interests in the flow through entities could seek individual relief.
For example, an Idaho limited partner could either apply for an the normal extension under 6081 and wait to receive the K-1 before filing, or file its return based on a reasonable estimate of its distributive share from the partnership even without receiving a Schedule K-1. If the partnership later filed a return and issued a K-1 to the Idaho partner reporting a larger distributive share of income, the partner could request relief from any understatement penalty.
The 50-percent partner would have the same options, though it will probably be more difficult for that partner to reasonably estimate its distributive share. Nevertheless, if the partner filed based on what information was reasonably available, and it turned out that the partner had understated the tax, relief from underpayment penalties would be available. Under the circumstances, the Service would grant that relief in both examples if the taxpayer filed an amended return explaining that the understatement was due to the lack of a K-1 from a partnership that was affected by Hurricane Katrina.
(8/14/06) Q: What is the significance of the title of Notice 2006-56: "Expanded Hurricane Katrina Relief for Certain Individual Taxpayers Claiming a Casualty Loss"? If you do not have a casualty loss, do you get the relief? What does claiming a casualty loss have to do with the extended deadline? The notice says nothing about a casualty loss deduction (other than in the title).
Suppose someone who lived in Orleans Parish suffered no physical hurricane damage. Do they qualify for the October 16, 2006, deadline? Alternatively, suppose someone in Orleans Parish had damage, but was adequately insured. Do they qualify for the October 16, 2006, deadline?
A: Thank you for pointing this out. The original title was incorrect and should not have inferred that the postponed deadlines were limited to taxpayers who file claims for casualty loss due to Hurricane Katrina. The postponed deadline applies to all individual taxpayers located in the designated disaster areas listed in Notice 2006-20. We corrected the title when the notice was published in the Internal Revenue Bulletin.
(8/14/06) Q: I didn’t see IRC Section 663(b) listed in Rev. Proc. 2005-27 as one of the acts extended under section 7508A. Is there anyone at IRS who can confirm whether an act not listed in Rev. Proc. 2005-27 is therefore not covered by the Katrina extension?
A: If an act is not listed in Treas. Reg. § 7508A-1(c)(1) or in Rev. Proc. 2005-27, and is not otherwise specifically postponed by notice or news release, then the time for performing that act is not postponed.
(2/15/07) Q: When is my return due if I filed an automatic extension of time to file before the announcement that the postponed due date was changed to October 16, 2006?
A: The postponements provided by IR-2006-96 and IR-2006-135 apply to a taxpayer even if the taxpayer had timely requested an extension of time to file prior to the granting of the postponements. Thus, a calendar year corporation who on Aug. 15, 2006, timely requested a six-month extension of time to file its 2005 Form 1120 from Aug. 28, 2006, its postponed due date pursuant to Notice 2006-20, is still eligible for the postponement provided by IR-2006-135. Accordingly, the corporation would then have until April 17, 2007, to timely file its return.
The IRS will automatically update the computer systems to show an extension to April 17, 2007, on the accounts of taxpayers who were affected by Hurricane Katrina and filed a request for an automatic six-month extension of time to file the 2005 return on or before August 28, 2006, or on or before October 16, 2006.
Taxpayers whose timely six-month extension requests were erroneously denied by the IRS should contact the IRS Toll Free Number (866) 562-5227 to have their accounts accurately adjusted.
(10/12/06) Q: Does the relief provided by the Service for affected taxpayers from the areas of Louisiana, Mississippi and Alabama most severely damaged by Hurricane Katrina include a postponement of time to file a Form 5500 series return? If so, what is the last day to file such a return?
A: Yes. The deadline for filing a Form 5500 series return is postponed. Notice 2006-20 states that the time to perform the acts listed in Rev. Proc. 2005-27 is postponed to 8/28/06. Paragraph 8.29 of that revenue procedure lists the deadline for filing a Form 5500 series return. However, the IRS will treat a tax year 2005 Form 5500 series return from an affected taxpayer as timely as long as the return is filed on or before 10/16/06. If an affected taxpayer needs additional time to file a Form 5500 series return, the affected taxpayer may file Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, to request an additional extension of time to file.
(3/8/07) Q: Are the 2005 income tax returns for taxpayers affected by Hurricane Katrina that were postponed until October 16, 2006, and granted an automatic extension of time to file until April 17, 2007, now granted an additional seven days to file?
A: As a result of the severe storms and tornadoes that struck on February 12-13, 2007, affected taxpayers located in Jefferson, Orleans and St. Martin parishes are granted additional time to file and pay until April 24, 2007, for returns and payments due on or after February 12, and before April 24, 2007. This additional time to file applies to those Hurricane Katrina 2005 returns that were previously postponed to October 16, 2006, and granted an extension of time to file until April 17, 2007.
(9/12/07) Q: My home was damaged by Hurricane Katrina and I need additional time to file my 2005 tax return. What tax relief has IRS granted to Jefferson parish (Louisiana) for filing returns for 2005?
A: For taxpayers located in the hardest hit areas of Hurricane Katrina, the IRS postponed the filing and payment deadlines until October 16, 2006, for tax year 2005. If a request for an automatic six-month extension was filed on or before October 16, 2006, the 2005 tax return must be filed on or before April 17, 2007.
Additionally, as a result of the severe storms and tornadoes that struck on February 12-13, 2007, affected taxpayers located in Jefferson, Orleans and St. Martin parishes are granted additional time to file and pay until April 24, 2007, for returns and payments due on or after February 12, and before April 24, 2007. This additional time to file applies to those Hurricane Katrina 2005 returns that were previously postponed to October 16, 2006, and granted an extension of time to file until April 17, 2007. Although the extension of time to file was granted until April 17, 2007, the tax payment was not extended and was due on or before October 16, 2006. Thus the postponement to April 24, 2007, for the February tornadoes does not apply to any tax due with the 2005 tax return.