Understanding the IRS Disaster Relief Programs for Taxpayers
Throughout the year, the Federal Emergency Management Agency (FEMA) will designate incidents that adversely affect residents in the affected areas as disasters. This FEMA designation puts relief efforts in motion, both short and long-term.
While immediate needs like food, water, and shelter are at the top of the list, long-term efforts, like relief options through the IRS, aim to help those affected get back on their feet.
What does the IRS do in the event of a disaster?
In the past, the Senate was required to vote every time the IRS wanted to grant disaster relief provisions to FEMA-designated disaster areas. Now, the IRS can give disaster relief by extending deadlines for “certain time-sensitive acts.” This includes filing returns and paying taxes during the disaster period. For example, affected taxpayers usually receive a tax refund more quickly by “claiming losses related to the disaster on the tax return for the previous year.”
Preparing for a disaster
While in some areas of the country, disaster preparedness feels more like a what-if scenario, other parts of the country are all-too-familiar with preparing for floods, wildfires, and tornados. The IRS recommends:
- Placing essential documents, including those for taxes and financial reporting, in a secure and waterproof location.
- Keeping duplicate copies of the above documents.
- Maintaining a list of property or an inventory of items owned.
- Educating yourself and employees on where to find pertinent information when a disaster occurs.
Recovering after a disaster
Suppose you or your business have gone through a natural disaster, and you cannot access your original tax documents. In that case, the IRS recommends the following resources for obtaining important financial information when you are ready:
- Tax transcripts:
- By phone: 1-800-908-9946
- Financial statements:
- Request a copy of past credit card statements from your existing bank or credit card company, either through their online banking platform, by phone, or in person.
- Property records:
- Record of sale/purchase: reach out to the companies that handled the purchase of the property, including title, escrow, and mortgager.
- Home improvement records: contact contractors for copies of invoices paid.
- Inherited property: put a request in with the court for records on the probate value.
Current disaster areas
The IRS keeps a list of current and past disaster relief offered on its website. Some of the more recent disaster-related tax relief programs include:
- Victims of Hurricane Ian
- Victims of Hurricane Fiona, including those in Alaska
- Victims of Hurricane Ida
- Victims of the California Wildfires
- Victims of Hurricane Dorian
- Victims of Hurricane Michael
- Victims of Hurricane Florence
We recommend talking with your tax advisor and visiting the IRS Disaster Relief Website for a comprehensive list.