IRS extends tax filing deadline following terroristic action in Israel

ARTICLE | October 17, 2023

Authored by RSM US LLP

Executive summary:  IRS extends tax deadline relief to taxpayers affected by terrorist attacks in Israel

The IRS has postponed various tax filing and tax payment deadlines, and the performance of other time-sensitive tax-related acts, for qualified taxpayers in Israel, Gaza and West Bank. The IRS provided this deadline relief after the Secretary of the Treasury determined the attacks that began Oct. 7, 2023, constituted “terroristic action.”

Affected taxpayers will have until Oct. 7, 2024, to file returns, pay any taxes that were originally due during this period and perform other time-sensitive tax-related acts.

Filing, payment and other tax relief for affected taxpayers in Israel, Gaza and the West Bank    

The IRS issued guidance granting relief to taxpayers affected by the terrorist attacks in Israel that began Oct. 7, 2023. The Secretary of the Treasury determined the attacks constitute terroristic action within the meaning of section 692(c)(2). Affected taxpayers now have until Oct. 7, 2024, to file various individual and business tax returns, make tax payments and to perform other time-sensitive tax-related acts.

According to Notice 2023-71, affected taxpayers include:

• Any individual whose principal residence and any business entity or sole proprietor whose principal place of business is in Israel, the West Bank or Gaza (covered area).
• Any individual, business or sole proprietor or estate or trust whose books, records or tax preparer is located in the covered area.
• Anyone killed, injured or taken hostage due to the terrorist attacks.
• Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker.
• Any spouse of an affected taxpayer, solely with regard to a joint return of two married individuals.

The relief postpones various tax filing and payment deadlines that occurred or will occur during the period from Oct. 7, 2023, through Oct. 7, 2024. This includes individual and calendar-year corporate taxpayers with valid extensions to file their 2022 tax returns that will run out on Oct. 16, 2023.

The relief does not include payments related to these 2022 returns because those payments were due on April 18, 2023. However, the relief also applies to individual, and business returns and payments normally due on March 15 and April 15, 2024. For these taxpayers, the relief includes more time to file and to pay.

The Oct. 7, 2024, due date applies to quarterly estimated income tax payments normally due Jan. 16, April 15, June 17, and Sept. 15, 2024. The relief applies to quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30, and July 31, 2024.

The relief also includes tax-exempt organizations whose 2022 extensions will run out on Nov. 15, 2023 and retirement plans contributions and rollovers.

The IRS relief includes other time-sensitive actions described in Notice 2023-71, Reg. section 301.7508A-1(c)(1) and Rev. Proc. 2018-58;

In addition, penalties on payroll and excise tax deposits after Oct. 7, 2023, and before Nov. 6, 2023, will be abated as long as the deposits are made by Nov. 6, 2023.

Automatic penalty relief

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the covered area based on previously filed returns and applies relief. Other eligible taxpayers can obtain this relief by calling the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000.

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extending filing, payment or deposit due date falling within the postponement period, the taxpayer or their representative should contact the IRS at the number on the notice to have the penalty abated.

Relief for those impacted outside the disaster area

The IRS will also work with any taxpayer who lives outside the covered area but whose records necessary to meet a deadline occurring during the postponement period are in the affected area.