Disaster Relief: What The IRS Giveth, The IRS Taketh Away (Part Two)

Disaster Relief: What the IRS giveth, the IRS taketh away. Or so it seems for disaster relief taxpayers until you get to page 4 of the collection notice.

As discussed in Part One, over one million taxpayers living in a disaster area filed their returns early with a balance due, expecting to make a timely payment by the postponed dates. Unfortunately, for taxpayers covered by a disaster declaration the IRS followed its normal collection procedures and mailed an initial collection notice and demand, Notice CP14, reflecting an incorrect due date. The notice also informed the taxpayers that interest and penalties would accrue after the due date reflected on the front page of the notice. This is wrong for taxpayers covered by disaster declarations because payment is not required prior to August 15 or October 16, depending on the disaster area when the original due dates fall within the postponement period. To remedy the incorrect date, the IRS included a short paragraph on the back of page four of the Notice CP14. However, the additional language did not solve the problem. Instead, it led to confusion and questions.

What Is the IRS Doing? What Can Affected Taxpayers Expect?

After receiving complaints from affected taxpayers, the IRS decided to send out updated notices (Notice CP14CL) to clarify that taxpayers covered by disaster declarations do not have to pay before the postponed due date, August 15, 2023, or October 16, 2023. The updated notice will reiterate that early payment or taxpayer response is not needed. Impacted taxpayers should expect to start seeing those letters in the mail shortly.

Bottom Line: Taxpayers covered by a disaster declaration who receive a Notice CP14 should read the entire document including any inserts. The subsequent mailings, CP14CL state, “Since your address of record is located in a federally declared disaster area, the IRS has automatically granted you disaster relief. This gives you an extension of time to file your tax returns as well as make your tax payment listed on the CP14 Notices. You do not need to contact us to get this extra time to pay.”
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Disaster Relief And Administrative Convenience

Severe storms have been ongoing in many parts of California since December. I have two family members with severe damage to their homes causing them to have to move out for repairs. And I know many others also suffered significant damage to property.

FEMA and the IRS responded with relief. The IRS has now issued three announcements of which of the 58 counties in California get a postponement of filing and payment and for what periods – generally, if eligible based on county of residence, filing and payment (such as for 2022 returns) is now October 16, 2023.

Each of the three announcements lists mostly the same counties, but the lists are not identical nor the start date. But after these three casualty relief notices, just three of 58 counties in California don’t get filing and payment relief – unless their records are in a county that gets relief and they ask the IRS for the postponed filing and payment date.

Well, California has a population of 39.2 million. The population of the three counties not included in relief are:

Lassen – population 31,000

Modoc – population 8,700

Shasta – population 181,000

These counties represent less than 1% of California’s population.
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COVID-19 Relief? Think Again!—Corporate Charitable Contributions For Disaster Relief

Since the COVID-19 pandemic hit the United States in early 2020, relief efforts have taken many forms—personal services, legislative efforts, volunteer hours, and even charitable contributions. Yes, when both people and corporations were in the midst of struggles, individuals and companies still made contributions throughout society. Although one hopes charitable contributions are not made for the primary reason of obtaining tax deductions, it is an added benefit that both individual and corporate taxpayers can enjoy under the Internal Revenue Code. That tax benefit was recently enhanced by federal legislation in December 2020 for corporate taxpayers. However, is the “enhancement” as helpful or sweeping as it seems?

Corporate Charitable Contributions, Generally

Generally, corporations cannot deduct charitable contributions that exceed 10 percent of their taxable income for a given tax year. Section 170 of the Internal Revenue Code provides, in part, the following: “The total deductions under subsection (a) for any taxable year (other than for contributions to which subparagraph (B) or (C) applies) shall not exceed 10 percent of the taxpayer’s taxable income.”[1]

For purposes of Section 170(b), “taxable income” is computed without regard to the following:

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Nina Olson, Taxpayer Advocate

Taxpayers affected by the wildfires in California that began October 8, 2017 may qualify for tax relief from the Internal Revenue Service. The President declared that a major disaster exists in the state of California and as of October 16, 2017, the following counties are impacted:


  • Butte
  • Lake
  • Mendocino
  • Napa
  • Nevada
  • Sonoma
  • Yuba

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Eva Rosenberg, Tax Advisor

Generally, whenever a major disaster strikes in the United States, the president issues a declaration – which triggers some special tax breaks and extensions for those in the disaster area.

In this case, President Trump has issued declarations for 9 disasters,  since taking office. We know there will be one for Hurricane Irma. But, so far, he has not issued the usual declaration for the Los Angeles – La Tuna fires. (But that’s a whole other discussion.)

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TaxConnections Blog PostIf you have been impacted by a disaster in your area like many of my friends most recently here in Colorado due to flooding as defined by FEMA and identified by our President causing you to be unable to meet your tax obligations the IRS may be able to assist you with payment and filing extensions, and if qualified, even with an expedited tax refund for casualty losses. President Obama last month declared the counties in Colorado Federal Disaster Areas:  Adams, Arapahoe, Boulder, Clear Creek, Crowley, Denver, El Paso, Fremont, Gilpin, Jefferson, Lake, Larimer, Lincoln, Logan, Morgan, Sedgwick, Washington and Weld.

If you reside or have a business in these counties may qualify for tax relief as the President’s declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area.

Specifically you need to know that deadlines falling on or after Sept. 11, and on or before December 2, 2013, have been postponed to December 2, 2013. This includes the quarterly estimated tax payment that was due on September 16. It also includes the due date of September 16 for calendar year corporations and partnerships that received extensions of time to file. Read More