What Tax Deadlines Does IRC 7508A Postpone?

Internal Revenue Code (IRC) Section 7508A is a provision that allows the Treasury Secretary to postpone certain tax-related deadlines for taxpayers affected by a federally declared disaster. When the President makes a disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the IRS can then exercise its authority under Section 7508A. This allows the agency to specify a period, up to one year, where certain required tax actions are temporarily suspended without penalty.

Determining Eligibility for Relief

Relief under IRC Section 7508A is contingent upon a “federally declared disaster,” which is an event for which the President has determined that federal assistance is warranted. The disaster area is a location where a major disaster has occurred. Once this declaration is made, the IRS identifies the specific localities covered by the relief.

The term “affected taxpayer” is broad and encompasses more than just those living directly in the disaster zone. Eligibility extends to individuals whose principal residence is in the area or businesses whose principal place of business is located there. Furthermore, individuals who were killed or injured while visiting the disaster area, as well as relief workers affiliated with a recognized government or philanthropic organization, are considered affected. A taxpayer may also qualify if the records necessary to meet a tax deadline are located within the disaster area.

Tax-Related Acts Postponed by the IRS

The IRS has the authority to postpone a wide range of time-sensitive acts. Postponed deadlines include the filing of individual income tax returns, such as Form 1040, and business income tax returns, like Form 1120. The payment of taxes associated with these returns is also postponed. This relief extends to making quarterly estimated income tax payments that would otherwise be due during the postponement period.

The relief also applies to other specific financial deadlines. Taxpayers receive an extension for:

• Making contributions to their Individual Retirement Arrangements (IRAs) and Health Savings Accounts (HSAs) for the prior tax year.
• Filing quarterly payroll and excise tax returns.
• Filing a petition with the U.S. Tax Court for those involved in disputes with the IRS.
• Meeting deadlines for pension plans and other employee benefit plans.

Not all deadlines are automatically postponed. The filing of information returns, such as Forms W-2, 1098, and 1099, is not covered by this relief. The IRS does not have the authority to postpone deadlines for taxes it does not administer, such as the firearms tax or alcohol and tobacco taxes. The postponement period runs concurrently with any other extensions a taxpayer may have; it does not add to it.

How Disaster Relief is Applied

The IRS issues official news releases and posts notices on its website that detail the specific relief being offered, including the covered disaster areas and the new postponed deadlines. For any taxpayer who has an IRS address of record within the designated disaster zone, this relief is applied automatically. These individuals and businesses do not need to contact the IRS or file any special forms to receive the postponement.

Taxpayers who qualify for relief but live outside the officially designated disaster area must take proactive steps. This includes relief workers or those whose necessary records are in the disaster zone. These taxpayers should contact the IRS disaster hotline at 866-562-5227 to request the relief and have their accounts coded appropriately. Tax preparers located in a disaster area who have clients outside the zone can also submit a bulk request for relief on behalf of their clients.

If an eligible taxpayer receives a late filing or late payment penalty notice from the IRS for a deadline that falls within the postponement period, they should call the telephone number provided on the notice. The taxpayer or their representative should explain that their tax obligations are covered by a specific disaster relief provision, and the IRS representative can then abate any penalties and interest that were incorrectly assessed.