Wildfires ripped through parts of Texas in late August, indiscriminately destroying homes and businesses. Those who were affected by the disaster likely have much to do to recover. The Internal Revenue Service recognizes this and is enacting tax relief for those who live in certain Texas counties -- Bastrop, Colorado, Leon, Travis, Williamson and Houston -- designated as federal disaster areas.
Individuals who live or own a business in one of the affected counties could be able to claim disaster-related personal property losses on their federal income tax return, assuming that the loss isn't covered under insurance or any other reimbursement. They also will have extended time to file their tax return -- until October 31 --if they had applied for an extension from the usual April filing date. This extension also applies to payment of "estimated taxes" and other time-sensitive actions. Recognizing that these taxpayers may have lost important household documents in the fires, the IRS is waiving the usual fee for requests for copies or transcripts of a previous year's tax return.
According to the IRS, if an affected taxpayer receives a penalty notice or collection call regarding their taxes, they should contact the IRS disaster hotline and speak to an IRS agent about their situation. In addition, those who don't live in the counties designated as federal disaster areas but who feel that they should be entitled to this tax relief can call the number. This could include those for whom the necessary records are located within the disaster areas, relief workers and individuals who were visiting the disaster areas at the time of the fires.
Taxes are complicated and uncertainties often exist regarding income, estate, corporate or other forms of taxes. Anyone affected would do well to consult an experienced Texas tax attorney. A knowledgeable tax attorney is familiar with the intricate tax laws in Texas as well as the federal Internal Revenue Code. He or she can answer important questions and help ensure that all tax matters are handled properly.
Source: KXAN 36, "IRS has tax relief for wildfire victims," Sept. 15, 2011