Tax Relief for Hurricane Rita Victims

IRS extends filing time for Hurricane Rita victims.

In response to Rita, the IRS has announced tax relief for individuals affected by the hurricane. Taxpayers in the core disaster areas now have until Feb. 28, 2006, to file all tax returns, pay taxes, and make any deposits due. Any interest, late-filing or late-paying fees or deposit penalties are waived if the original or extended deadline falls on or after Sept. 23, 2005.

Taxpayers in covered disaster areas have been granted the same extension for filing income tax returns, tax payments and estimated taxes. This relief does not apply to information returns, or employment or excise tax deposits. However, penalties and interest might be waived for a reasonable cause. This relief includes the second filing extension to October 17 for individual taxpayers, the October 31 deadline for filing quarterly employment and excise tax returns, and employment and excise deposits due on or before Feb. 28, 2006. Other time-sensitive acts, such as filing Form 5500, are extended to Feb. 28, 2006 as well.

Disaster Area Locations

Core Disaster Areas. The hardest-hit areas are considered to be core disaster areas. Taxpayers in these Texas counties and Louisiana parishes do not need to note anything on their tax returns to receive the extensions and other relief. It will be automatically applied.

Nine Texas Counties: Chambers, Galveston, Hardin, Jasper, Jefferson, Liberty, Newton, Orange and Tyler

21 Louisiana Parishes: Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Plaquemines, Sabine, St. Landry, St. Martin, St. Mary, Terrebonne, Vermilion, Vernon and West Baton Rouge.

Covered Disaster Areas. All other areas of Texas and Louisiana are considered covered disaster areas and qualify for tax relief. Taxpayers needing to claim relief in the covered disaster areas should identify themselves by marking "Hurricane Rita" in red ink at the top of their tax forms (except for Form 5500, where filers should check Box D in Part 1 and attach a statement).

Learn more about the different levels of disaster areas and how they affect your tax relief.

Affected Taxpayers
Qualified taxpayers include those living in the covered disaster areas, those outside the individual assistance areas whose records or tax professionals are located in the covered areas, businesses located in the disaster area, and relief workers. Individuals visiting the covered areas that were killed or injured due to the hurricane also qualify for relief.

Other Relief Information:

• The IRS will waive fees and expedite requests for copies of tax returns (Form 4506) or requests for transcripts (Form 4506-T).
• The IRS has suspended compliance activities in affected areas until Feb. 28, 2006. If you receive IRS notices during this time, call the IRS toll-free disaster hotline at 1-866-562-5227 for help.
• Casualty loss reminder. Affected taxpayers may claim a casualty loss on their current- or prior-year returns. See IRS Publication 547 for details.

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