Guidance for taxpayers affected by Hurricane Laura


Authored by RSM US LLP

Guidance for relief from certain tax filings, deposits and penalties has been issued to those affected by Hurricane Laura. 

IRS Relief

Yesterday, the Internal Revenue Service (IRS) issued guidance to taxpayers in areas recently affected by Hurricane Laura.  

The IRS granted postponement of certain deadlines under its section 7508A authority for those individuals and businesses located in areas affected by a federally declared disaster. The current qualifying areas include:

  • Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, and Vernon parishes, Louisiana 

Taxpayers in locations that may be added later will also be qualified for the relief. The IRS stated that relief will be afforded automatically to added areas. The current list can be found at the IRS disaster relief site.  

The general relief applies to original or extended tax filing and payment deadlines beginning on or after Aug. 22, 2020 and ending before Dec. 15, 2020. A deadline falling between these dates is postponed to Dec. 31, 2020. In the case of individuals, this means that a 2019 return originally due July 15, 2020, but extended to Oct.15, 2020, is now due Dec. 31, 2020. Note that this relief would not extend payment of tax due by July 15, 2020, only the filing. But a quarterly estimated tax payment due Sept. 15, 2020, would qualify for the postponement for taxpayers in the affected areas. 

The relief specifically includes excise and payroll tax filings, deposits and penalties. Form 720, Quarterly Federal Excise Tax return normally due on Nov. 2, 2020, would qualify for the postponement. In addition, penalties on semi-monthly excise tax and payroll tax deposits due on or after Aug.22, 2020 and before Sept. 8, 2020, will be automatically abated as long as the deposits are made by Sept. 8, 2020. Although penalties will be automatically abated, the IRS advises taxpayers who receive penalty notices and who otherwise qualify, should call the number on the notice to request abatement. The IRS disaster relief page contains details on other returns, payments and tax-related actions qualifying for the additional time. 

The guidance also states that the IRS will work with any taxpayer who may not be located within a covered area, if the business records necessary to comply with a time sensitive act is located within the covered area. Taxpayers in this situation are encouraged to call the listed phone number. 

TTB Relief

The Alcohol and Tobacco Tax and Trade Bureau (TTB) issued reminders on Aug. 20, 2020, and Aug. 27, 2020, reminding affected excise tax industry members and taxpayers of its existing guidance related to natural disasters.  Businesses (retailers, wholesalers, importers, export warehouse proprietors and manufacturers of beverage alcohol and tobacco products) may file claims with the TTB for the payment (refund or allowance of credit) of Federal excise taxes paid on beverage alcohol or tobacco products lost, rendered unmarketable or condemned by a duly authorized official under various circumstances, including where the President has declared a major disaster.

Some of the issues that may apply to affected industry members or taxpayers include:

  • Filing claims for taxes on losses
  • Waivers of excise tax penalties
  • Reporting on damaged and unmarketable products

TTB procedures provide that business affected by a natural disaster should contact the National Revenue Center.

Washington National Tax Observations

The IRS and TTB guidance will be welcome relief to those affected by the Hurricane Laura. Recently we posted an alert on similar guidance for those taxpayers affected by the California wildfires and the Iowa derecho.   

If you have any questions concerning information provided in this tax alert, please contact a member of the WNT Tax Controversy or Excise Tax groups.