Broker Check

October 15, 2001

Tax Relief for Victims of September 11 Attack
FEDERAL

          The Internal Revenue Service has issued initial administrative relief for taxpayers affected by the terrorist attacks on September 11. They consist of the following:
          1) The President has declared the following areas to be disaster areas:
              Bronx, Brooklyn, Manhattan, Queens, and Staten Island in New York
              and Arlington County in Virginia. Disaster area relief is available not only
              to taxpayers in these counties affected by the disaster, but also to other
              affected taxpayers, regardless of where they reside. These "other
              taxpayers" include:
                 a) victims of the four crashes and those on the ground
                 b) all workers assisting in the relief activities of the covered disaster
                     areas and in Pennsylvania, regardless of whether they are affiliated
                     with a recognized government or philanthropic organization, and
                 c) taxpayers whose place of employment is located within the
                     Presidentially declared disaster area. 
          
2) A taxpayer who suffers a disaster loss (i.e. damaged apartment,
              destroyed business inventory, additional clean-up cost) can take the
              deduction in the tax year in which the disaster occurs or can elect to
              deduct the loss in the immediately preceding tax year. Thus, taxpayers
              affected by the disaster area declaration may claim casualty losses on
              amended 2000 tax returns to generate some immediate tax relief from
              their losses.
          3) Affected individual taxpayers who have an estimated tax payment due
              September 17, 2001 may postpone that payment by including the 
              amount with their final estimated payments for tax year 2001, which are
              due January 15, 2002.
          4) Affected corporate taxpayers that face an estimated tax payment after
              September 11, 2001, and before January 15, 2002 may postpone that
              payment until January 15, 2002.
          5) Affected individuals that have extended the time for timely filing their tax
              year 2000 federal individual income tax return beyond September 10,
              2001 will have until February 12, 2002 to file their returns. A similar 
              postponement to pay the tax shown on the return is generally not
              permitted, however, the period from September 11, 2001 until January 9,
              2002 will be disregarded in the calculation of any failure to pay penalty.
              Since the tax return due date is extended, it is likely that the date for
              contributions to pension plans and SEPs is extended as well.
          6) Affected taxpayers other than individuals, including businesses whose
              principal place of business is located in the disaster area and businesses
              located outside of the disaster area, whose records are necessary to
             meet a filing or paying deadline and are maintained in the disaster area
              (i.e. a CPA in NYC has the records) are granted a 120 day
             postponement and a six month extension to file certain federal tax returns
              otherwise due on or after September 11, 2001 and on or before
              November 30, 2001 and to pay the tax shown or required to be shown
              on those returns.
          7) Taxpayers who have difficulty in meeting their federal tax obligations
              because of disruption in the transportation and delivery of documents by
             mail or private delivery service resulting from the terrorist attack and do
             not otherwise qualify for relief will have until November 15, 2001 to file
             returns and make payments required to be made from September 11,
              2001 through October 31, 2001.
          8) The IRS cannot extend the deadline for employment or excise tax
             deposits, but it will waive penalties on deposits required to have been
              made between September 11, 2001 and October 31, 2001 if those
              deposits are made by November 15, 2001.

          Anyone entitled to the above relief should write in red ink at the top of their return "September 11, Terrorist Attack".

NEW YORK

          The Commissioner of Taxation and Finance has postponed deadlines from September 1, 2001 through December 10, 2001 for:
            a) filing any returns
            b) paying any tax or installment of tax
            c) filing a petition for credit or refund or for determination of a deficiency or
             application for review of a decision
            d) allowing a credit on a refund
            e) assessing tax
            f)  giving or making a notice or demand for payment of tax 
            g) collecting tax by levy or otherwise 
            h) bringing suit by New York State for any tax liability
            i)  any other act required or permitted under the Tax Law or specified for
                the New York State Regulations.
          Taxpayers directly affected by these tragic events include: 
            a) all workers assisting in the relief activities; 
            b) any taxpayer whose records necessary to meet tax filing, paying or other
               deadlines are not available due to the attacks;
            c) taxpayers who have difficulty in meeting tax filing, payment or any other
                deadline because of disruptions in communications services (i.e.
                telephone, facsimile, or electronic mail resulting from terrorist attacks; 
            d) taxpayers whose tax practioners were, due to the attack, unable to
                complete work to meet tax filing, payment and other deadlines on behalf
                of their clients.

          Businesses or individuals who are affected by the tragic events of September 11, 2001 should mark "WTC" on the top center of the front page of any late filed return, extension, declaration of estimated tax, estimated tax voucher or other document and should include a brief explanation of the circumstances that affected their ability to meet tax deadlines.

          If you have any questions about these or any other financial matters, please call us.

          Please note that this and other newsletters are available on our website at www.lisch.com.