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.