Hurricane Irene Tax Deadlines Extended

[Lion EA]

From this week's NAEA e-newsletter

IRS Grants Disaster Relief

E@lert would like to revisit news NAEA has posted on its social media sites (Twitter and Facebook) IRS in two press releases has granted disaster relief for Hurricane Irene victims.

More specifically, in IR-2011-88, IRS announced that taxpayers whose preparers were located in an area that was under an evacuation order or a severe weather warning because of Hurricane Irene (even if the preparer was not in a federally declared disaster area) will have until September 22 to file returns normally due on September 15.

On the same day IRS released more expansive relief targeted at taxpayers located in federally declared disaster areas. IR-2011-87, which has been updated at least four times to expand the federal disaster area, postpones both filing and payment deadlines to October 31, 2011. This extension includes corporations and businesses that were on a September 15 extension as well as individuals (and Sched. C businesses) that were on an October 17 extension. The press release details the counties and municipalities covered by the relief.

While this relief is certainly welcome, it prompted questions from a few sharp EAs who wanted to know exactly how their clients are treated properly. Naturally, your GR team chatted with IRS in order to provide you with good, timely advice. With respect to the short extension, EAs should keep in mind that the extension does NOT provide relief for payment of taxes owed, so the filing deadline is moved one week, but the payment deadline does not move. Further, we are informed that there is no requirement to self-identify or notate the return taking advantage of the one-week window. Nonetheless, we suggest you note the returns you are filing, perhaps by referencing (and attaching a copy of) IR-2011-88.

With respect to the more expansive relief, the key question revolves around the fact that IRS shuts down the e-file system shortly after the end of the individual extension period (in this case, October 17), yet return preparers are required to e-file (under pain of a disreputable conduct charge in Circular 230, amongst other fines and penalties). Clearly, EAs cannot file these returns electronically because IRS will not make the e-file system available (yes, we asked, just for the record—no, we did not say ‘pretty please’ but would have if we thought it would have made a difference). So what to do? We suggest attaching Form 8948, Preparer Explanation for Not Filing Electronically.

And before you gang up on E@lert and suggest that this advice runs contrary to advice IRS offers on its e-file requirement FAQ page, E@lert concedes the point. FAQ 12 states “preparers do not have to complete Form 8948 and attach it to any paper return IRS does not accept electronically,” while FAQ 19 further states, “only returns that cannot be e-filed are exempt from the requirement.” You are not required to use Form 8948. We just think it is a very good idea to do so.