IRS Grants Filing Extension To Hurricane-Hit Businesses

by Mike Godfrey, Tax-News.com, Washington

29 August 2006

The US Internal Revenue Service has announced that it will grant to businesses in the Gulf Coast an additional postponement of filing and payment requirements as part of the continuing effort to assist victims of Hurricane Katrina.

Based on recent meetings with tax practitioners and IRS employees in the disaster areas, the Agency has decided to postpone the filing and payment deadlines for certain businesses to October 16, 2006, in consideration of the continuing impact of Hurricane Katrina.

The postponement applies to taxpayers located in the designated disaster areas. Business taxpayers in seven Louisiana parishes and three Mississippi counties will automatically qualify for this postponement. In addition, taxpayers in other locations -- covering 11 Alabama counties, 31 Louisiana parishes and 48 Mississippi counties -- can also obtain the filing and payment postponements by self-identifying themselves to the IRS.

The IRS says that postponement of time to make payments applies to tax payments, including estimated tax payments, due on or after August 29, 2005, but before October 16, 2006. In addition, the failure to deposit penalty will be waived for affected taxpayers who are unable to make their deposits during this time period.

The filing and payment postponement applies to individual, corporation, partnership, estate, trust, S Corporation, generation-skipping, employment and certain excise tax returns with original or extended due dates that fall on or after August 29, 2005, but before October 16, 2006.

However, while the agency said that while it can postpone the time to file the 2004 and 2005 returns until October 16, 2006, the law does not authorize it to grant additional interest and failure to pay penalty relief for the 2004 tax year.

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