IRS Grants Tax Relief to Storm Victims

WASHINGTON - The Internal Revenue Service is granting some tax relief to taxpayers in counties that have been declared disaster areas due to storms this month. This includes parts of Arkansas, Kentucky and Ohio. This same relief will apply in any additional counties that are declared disaster areas because of these storms.

Taxpayers whose returns are due March 15 will not face late filing or late payment penalties if they file and pay by April 15, 1997. By law, interest must be charged from the original due date until the tax is paid.

Farmers and fishers who did not pay their 1996 estimated tax in January -- because they expected to file their returns and pay the balance due by March 3 -- have until April 15, 1997, to file and pay the balance due to avoid an estimated tax penalty.

Taxpayers who have an estimated tax installment due March 15 will not be penalized if that payment is made by April 15, 1997.

Although the IRS cannot extend the deadline for employment or excise tax deposits, it will abate penalties on tax deposits due from March 3 through 15, 1997, if undeposited taxes are deposited no later than March 31, 1997.

In addition to the relief above, the IRS will suspend examination and collection activities for all taxpayers within the disaster areas through April 7.

Taxpayers may claim uninsured casualty losses on either their 1996 tax returns or their 1997 forms next year. IRS representatives will be at FEMA Recovery Centers to help taxpayers with returns or to expedite requests for tax account transcripts needed for disaster-related loans.

Affected taxpayers should put the words "MARCH FLOODS / TORNADOES" or similar language at the top of any return relying on storm-related relief.

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