The IRS has granted tax relief to the victims of wildfires that took place in parts of California on August 14, 2020. The affected taxpayers will now have until December 15, 2020, to file various individual and business tax returns and make tax payments. The disaster area in California includes the counties of:
- Lake,
- Monterey
- Napa,
- San Mateo,
- Santa Cruz,
- Solano,
- Sonoma and
- Yolo
Taxpayers who live or have a business in the disaster area may qualify for tax relief.
Filing and Payment Deadlines Extended
The IRS has postponed various tax filing and payment deadlines that occurred starting on August 14. As a result, the affected taxpayers will now have until December 15, 2020, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2019 return due to run out on October 15, 2020, will now have until December 15, 2020, to file. The IRS noted, however, that because tax payments related to 2019 returns were due on July 15, 2020, those payments are not eligible for this relief. The December 15 deadline also applies to quarterly estimated income tax payments due on September 15, and the quarterly payroll and excise tax returns normally due on October 31. Further, the deadline also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2019 extensions run out on October 15. In addition, penalties on payroll and excise tax deposits due after August 14 and before August 31, will be abated as long as the deposits are made by August 31.
The affected taxpayers do not need to contact the IRS to get this relief. In addition, the IRS will work with taxpayers, including workers affiliated with a recognized government or philanthropic organization, who live outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227.
Casualty Losses
Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2020 return normally filed next year), or the return for the prior year (2019).
Taxpayers claiming a disaster loss on their tax return should write the appropriate FEMA declaration number (4558 for California) on any return claiming a loss. Finally, the IRS has requested taxpayers to see Publication 547 for information on disaster recovery.
Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Newport Beach and Yorba Linda, California
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)