By Nathan R. Olansen

Victims of recent severe storms and flooding in numerous states have more time to make tax payments and file returns if they are affected taxpayers in counties that have been designated as federal disaster areas qualifying for individual assistance. Certain other time-sensitive acts also are postponed. The IRS has recently announced on its website that additional areas in Virginia have been designated as federal disaster areas qualifying for individual assistance.

Who gets relief. Only taxpayers considered to be affected taxpayers are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. Affected taxpayers are those listed in Treas. Reg. § 301.7508A-1(d)(1)) and thus include:

  • Any individual whose principal residence, and any business entity whose principal place of business, is located in the counties designated as disaster areas;
  • Any individual who is a relief worker assisting in a covered disaster area, regardless of whether he is affiliated with recognized government or philanthropic organizations;
  • Any individual whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area;
  • Any estate or trust that has tax records necessary to meet a filing or payment deadline in a covered disaster area; and
  • Any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife.

What may be postponed. Under Code Sec. 7508A, the IRS gives affected taxpayers until the extended date (specified by county, below) to file most tax returns (including individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date falling on or after the onset date of the disaster (specified by county, below), and on or before the extended date. The IRS also gives affected taxpayers until the extended date to perform certain other time-sensitive actions that are due to be performed on or after the onset date of the disaster, and on or before the extended date.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 or 5498 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise deposits, due on or after the onset date of the disaster, and on or before the deposit delayed date (specified by county, below), provided the taxpayer made these deposits by the deposit delayed date.

Affected Virginia and North Carolina (North Carolina has not changed) areas and dates for storms, floods and other disasters occurring in 2018 that are federal disaster areas qualifying for individual assistance, as published on IRS's website, are carried below.

North Carolina: The following are federal disaster areas qualifying for individual assistance on account of Hurricane Florence that took place beginning on Sept. 7, 2018: Allegany, Anson, Ashe, Beaufort, Bladen, Brunswick, Cabarrus, Carteret, Chatham, Columbus, Craven, Cumberland, Dare, Duplin, Granville, Greene, Harnett, Hoke, Hyde, Johnston, Jones, Lee, Lenoir, Montgomery, Moore, New Hanover, Onslow, Orange, Pamlico, Pender, Person, Pitt, Randolph, Richmond, Robeson, Sampson, Scotland, Stanly, Union, Wayne, Wilson, and Yancey counties.

For these North Carolina counties, the onset date of the disaster was Sept. 7, 2018, and the extended date is Jan. 31, 2019 (which includes taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15, 2018; the quarterly estimated income tax payments due on Sept. 17, 2018 and Jan. 15, 2019; the quarterly payroll and excise tax returns normally due on Oct. 31, 2018; and the tax-exempt organizations that operate on a calendar-year basis and had an automatic extension due to run out on Nov. 15, 2018). The deposit delayed date was Sept. 24, 2018.

Virginia: The following are federal disaster areas qualifying for individual assistance on account of Hurricane Florence that took place beginning on Sept. 8, 2018: Charles City, Halifax, Henry, King and Queen, King William, Lancaster, Nelson, Patrick, Pittsylvania, and Russell counties and the Independent Cities of Franklin, Newport News, Richmond, and Williamsburg.

For these Virginia areas, the onset date of the disaster was Sept. 8, 2018, and the extended date is Jan. 31, 2019 (which includes the taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15, 2018; the quarterly estimated income tax payments due on Sept. 17, 2018 and Jan. 15, 2019; the quarterly payroll and excise tax returns normally due on Oct. 31, 2018; and the tax-exempt organizations that operate on a calendar-year basis and had an automatic extension due to run out on Nov. 15, 2018). The deposit delayed date was Sept. 24, 2018.

For assistance with meeting any of your delayed tax filing obligations and/or requesting an abatement of associated late filing and late payment penalties, call me at (757) 687-8888.