Tax Relief Provisions for Disaster Losses

Published date01 January 2018
Date01 January 2018
AuthorShirley Dennis‐Escoffier
© 2018 Wiley Periodicals, Inc.
Published online in Wiley Online Library (
DOI 10.1002/jcaf.22318
Tax Relief Provisions for
Disaster Losses
Shirley Dennis-Escoffier
Weather-related casualty losses
have been on the increase with
Hurricanes Harvey, Irma, and
Maria recently leaving a trail
of destruction. Businesses
and their employees can take
advantage of the tax rules to
somewhat mitigate their losses.
This column looks at the tax
treatment of various options
for providing disaster assis-
tance to employees as well as
the casualty loss rules for busi-
nesses and their employees and
concludes with a summary of
the Disaster Tax Relief Act
passed by Congress on Septem-
ber 28, 2017.
Special relief provi-
sions apply when a casualty
loss occurs in an area that is
declared a disaster area by the
president of the United States.
Areas qualifying for disaster
assistance (including those
affected by Hurricanes Harvey,
Irma, and Maria) are identi-
fied by the Internal Revenue
Service (IRS) based on deter-
minations made by the Federal
Emergency Management
Agency (FEMA); the FEMA
website lists affected areas by
county (
disasters). The IRS publishes
news releases on its website
regarding the specific relief
provisions that are available for
each disaster area (https://www
The IRS has issued sev-
eral notices informing affected
taxpayers of special relief
including extended deadlines
for filing tax returns. Affected
taxpayers include any business
entity whose principal place
of business and any individual
whose principal residence is
located in a county designated
as a disaster area. It also
includes any individual who is a
relief worker assisting in a cov-
ered disaster area and taxpay-
ers whose tax records necessary
to meet a filing or payment
deadline are maintained in a
covered disaster area.
Affected businesses and
individuals have until January
31, 2018, to file returns and pay
any taxes that were originally
due during the covered period.
The covered period began
August 23, 2017, for Hurricane
Harvey; September 4, 2017,
for Hurricane Irma; and Sep-
tember 15, 2017, for Hurricane
Maria. This relief includes an
additional filing extension for
businesses with valid exten-
sions that were due to expire
on September 15, 2017, and an
extension of the deadline for
making quarterly estimated tax
payments with a September 15,
2017, deadline and January 16,
2018, deadline, as well as relief
for the October 31 deadline for
quarterly payroll tax returns.
For individuals, the relief
applies for 2016 income tax
returns that received an exten-
sion until October 16, 2017;
however, the tax payments
related to these 2016 returns
were originally due on April 18,
2017, and so these payments
are not eligible for relief. If
an affected taxpayer receives
a late filing or late payment
penalty notice from the IRS
that had original or extended
filing, payment or deposit due

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