The following provides a summary of tax relief granted to date for those impacted by Hurricanes Katrina and Rita as well as a brief overview of our ongoing outreach/assistance efforts.  Much of the information can be found on www.irs.gov.

 

Hurricane Katrina and Rita Tax Policy and Assistance Update

September 28, 2005

 

*         A total of 179 counties and parishes have been declared by the President to receive disaster assistance related to Katrina.  These represent 22 counties in Alabama, 11 counties in Florida, 64 parishes in Louisiana and 82 counties in Mississippi.  For Rita, a total of 254 counties in Texas (9 "individual") and 64 parishes in Louisiana (12 "individual") have been declared for disaster assistance.  

 

Filing and Payment Relief/Compliance Activity Suspension

·         Filing and payment relief has been granted to all affected taxpayers until February 28, 2006 (consistent with legislation), including:

o        Individuals and businesses with addresses in the counties or parishes in Alabama, Florida, Louisiana and Mississippi designated by FEMA for relief

o        Taxpayers whose books, records or tax practitioners are located within the FEMA declared counties or parishes

o        Relief workers/spouses

o        Visitors to the disaster areas who were killed or injured resulting from the disaster

Additional time may also be granted in the more severely impacted areas.

 

·         The filing and payment relief granted includes the abatement of interest and any late filing, late payment or failure to deposit penalties that would apply.  The relief includes the September 15 due date for estimated taxes; the September 15 due date for calendar-year corporate returns with automatic extensions; the October 17 deadline for individuals who received a second extension for filing their individual income tax returns; the October 31 deadline for filing quarterly federal employment and excise tax returns; and employment and excise deposits due on or after August 29, 2005, and on or before February 28, 2006.

 

*         IRS has suspended many compliance activities throughout the most severely affected areas.

 

Taxpayer Assistance and Outreach

*         IRS employees are providing tax assistance at FEMA Disaster Assistance Sites in numerous locations and will continue to help with tax matters as additional sites are opened in other locations.

o        As of COB September 27, 41 (29 FEMA and 12 non-FEMA) sites were open in 12 states plus the District of Columbia: AL - 2; CA - 4; DC - 1; FL - 1; GA - 3; LA - 8; MN - 1; MS - 11; NC - 1; OK - 2; PA - 1; SC - 1; TX - 5.  Rigorous analysis of taxpayer need and locations continues to identify the appropriate locations for additional tax assistance sites.  Approximately 45 IRS employees are staffing these sites, providing the following assistance:

§         Distributing Disaster Relief Kits and outreach materials

§         Providing copies of transcripts or tax forms

§         Assisting taxpayers with filing claims or amended returns

 

·         Additional assistance:

o            Provided Disaster Relief Kits and assistance information to over 600
non-FEMA sites, such as Red Cross shelters, churches and schools

o            Assigned thousands of employees to augment the FEMA call registration center

o            Established a special toll-free disaster telephone number (1-866-562-5227).

o            Coordinated with practitioner and industry stakeholder partners to distribute disaster tax relief information to their constituency.

o            Signed Memoranda of Understanding (MOUs) with the American Institute of Certificated Public Accountants (AICPA), the National Association of Enrolled Agents (NAEA) and the American Association of Attorney-Certified Public Accountants (AAA-CPA) to jointly provide assistance to taxpayers through local disaster relief centers.  Agreements are pending with the American Payroll Association (APA), the American Bar Association (ABA) and the National Association of Tax Professionals (NATP).

o            Coordinating with the Federation of Tax Administrators (FTA) to provide assistance to the impacted state taxing agencies and victims of Hurricane Katrina.

o            Coordinating with the Department of Labor to expedite verification of filing for self-employed individuals who qualify for Disaster Unemployment benefits

o            Launched a special section on IRS.gov 

o            Coordinating with the United States Postal Service to locate mail directed to the IRS from the impacted areas just before Hurricane Katrina, ensuring the impacted taxpayers receive appropriate credit for returns and payments 

o            Coordinating with the United States Postal Service to address systemic issue regarding mail delivery to ensure that impacted taxpayers receive pending refunds and other assistance.  IRS has partnered with Financial Management Service (FMS) and Social Security Administration (SSA) to explore other options for the delivery of mail.

 

Tax Administration Relief

 

Hurricane Rita

 

*         Waived the low income housing tax credit rules that prohibit owners of low income housing from providing housing to victims of Hurricane Katrina who do not qualify as low income. 

*         Waived the tax penalty when dyed diesel fuel is sold for use or used on highways. 

*         Permitted vehicles registered for highway use to remove aviation fuel from certain airports without violating the favorable excise tax treatment to which those airport fueling terminals are currently entitled.

*         Provided relief intended to support leave-based donation programs to aid hurricane victims.  Under this relief, employees can forgo leave in exchange for employer cash payments made before January 1, 2007, to qualified tax exempt organizations providing relief to Hurricane Katrina victims. 

*         Increased the optional standard mileage rates to 48.5 cents for all business miles driven between September 1, 2005 and December 31, 2005.

·         Extended the deadline until October 31, 2005, for certain employee benefit plans to make minimum funding contributions or to apply for waivers.

·         Implemented an expedited review and approval process for new organizations seeking tax-exempt status in order to provide relief to victims of Hurricane Katrina.

·         Provided issuers of tax exempt bonds affected by Hurricane Katrina with additional time to file certain information and arbitrage rebate returns.

·         Provided broad-based relief to retirement plan participants affected by a major disaster by allowing streamlined loan procedures and liberalized hardship distribution rules for certain retirement plans.

 

Hurricane Rita

·         Filing and payment relief granted to taxpayers impacted by Hurricane Rita through February 28.

·         Evaluation of other administrative relief provisions is underway to determine appropriate additional relief.

Open and IRS Staffed Disaster Assistance Sites

Total = 41 as of COB September 27, 2005

 

·         Alabama (2)

o        Birmingham

o        Montgomery

·         California (4)

o        Bellvue

o        Los Angeles - Bellvue

o        Los Angeles - Rickenbacker

o        Los Angeles - West 7^th Street

o        San Diego

·         District of Columbia (1)

·         Florida (1)

o        Pensacola

·         Georgia (3)

o        Decatur

o        Lawrenceville

o        Marietta

·         Louisiana (8)

o        Lafayette

o        Minden

o        Monroe

o        Placquemine

o        Shreveport

o        Slidell

o        Thibodaux

o        Vacherie

·         Minnesota (1)

o        St. Paul

·         Mississippi (11)

o        Biloxi

o        Gulfport

o        Jackson

o        Moss Point

o        Ocean Springs

o        Pascagoula

o        Pass Christian

o        Picayune

o        Poplarville

o        Purvis

o        Waveland

·         North Carolina

o        Greensboro

·         Oklahoma (2)

o        Oklahoma City

o        Tulsa

·         Pennsylvania (1)

o        Pittsburgh

·         South Carolina (1)

o        Columbia

·         Texas (5)

o        Austin

o        Dallas - Convention Center

o        Fort Worth

o        Houston - South Loop

o        Tyler

 

Disaster Assistance Metrics

Data cumulative for week ending:  September 23, 2005

 

Both FEMA and non-FEMA sites

State	Total Taxpayers Assisted	Total Disaster Kits Distributed
Alabama	937	208
California	1,032	1,299
Florida	388	67
Georgia	378	647
Louisiana	592	323
Minnesota	74	Data unavailable
Mississippi	1,925	1,890
North Carolina	180	110
Oklahoma	310	30
Pennsylvania	42	47
South Carolina	5	5
Texas	1,671	164
Washington DC	Data unavailable	Data unavailable
Total	7,534	4,790

 

 

Program	Total Calls	Total Disaster Kits Distributed
FEMA Registration Support	488,005
Special Disaster Relief Toll-Free Line	21,264
IRS Distribution Centers		127,163

 

 News Releases and IRB Guidance

*         Issued news releases pertaining to disaster relief provisions

o        IRS Grants Tax Relief for Hurricane Katrina Victims (August 30)

o        IRS Creates Disaster Relief Toll-Free Number (September 1)

o        IRS Expands Relief Area for Katrina Victims (September 2)

o        Treasury and IRS Expand Availability of Housing for Hurricane Victims (September 2)

o        IRS Waives Diesel Fuel Penalty Due to Hurricane Katrina (September  2)

o        IRS Grants Relief on Minimum Funding Contributions to Employee Benefit Plans Affected by Hurricane Katrina (September 2)

o        IRS Expedites Charity Applications, Urges Use of Existing Charities (September 6)

o        IRS and AICPA Announce Agreement to Assist Disaster Victims (September 7)

o        IRS Allows Highway Removal of Aviation Fuel Due to Hurricane Katrina (September 7)

o        Katrina Victims Will Have Until Jan. 3 to File and Pay Taxes, IRS Says (September 8)

o        Treasury, IRS Announce Special Relief to Encourage Leave-Donation  Programs for Victims of Hurricane Katrina (September 8)

o        Extra Time Granted for Tax-Exempt Bond Issuers Affected by Katrina (September 9)

o        IRS Increases Mileage Rate Until Dec. 31, 2005 (September 9)

o        Guidance Issued On Temporary Domestic Shipping Operations (September 12)

o        5,000 IRS Telephone Operators Register Hurricane Victims for FEMA Benefits (September 14)

o        Katrina Relief Workers Have Until Jan. 3 to File and Pay Taxes (September 14)

o        IRS Extends Diesel Fuel Penalty Relief Due to Hurricane Katrina (September 15)

o        Retirement Plans Can Make Loans, Hardship Distributions to Katrina Victims (September 15)

o        IRS Announces Additional Agreements to Assist Disaster Victims (September 21)

o        IRS Updates Hurricane Katrina Tax Relief Guidelines for Taxpayers in Four States, Relief Workers and Others Impacted (September 21)

o        Tax Relief Granted for Hurricane Rita (September 26)

o        Deadlines for Taxpayers Affected by Hurricane Katrina Extended Until Feb. 28 (September 28)

 

*         Issued numerous IRB Notices and Announcements, detailing offered relief:

o        Announcement 2005-41  Optional Standard Mileage Rates

o        Announcement 2005-69  Disaster Relief for Issuers of Tax-Exempt Bonds Affected by Hurricane Katrina

o        Announcement 2005-70  Hurricane Katrina Relief (relating to loans from retirement plans and hardship distributions)

o        Notice 2005-60  (Relief from minimum funding requirements for employee benefit plans)

o        Notice 2005-65  Announcement of Rules Relating to the Temporary Operation of Ships in the Domestic Trade as a Result of Hurricane Katrina

o        Notice 2005-66  (Extension of deadlines for certain governmental acts)

o        Notice 2005-68  Treatment of Certain Amounts Paid to Section 170(c) Organizations under Certain Employer Leave-Based Donation Programs

o       Notice 2005-69  Relief from Certain Low-Income Housing Credit Requirements Due to Hurricane Katrina

o       Notice 2005-73  (Update of Hurricane Katrina Tax Relief Guidelines)