IRS provides relief to victims of the September California wildfires


Authored by RSM US LLP

The Internal Revenue Service announced this week that victims of the California wildfires that began on Sept. 4, 2020, now have until Jan. 15, 2021, to file various individual and business tax returns and make tax payments. 

The IRS granted postponement of certain deadlines under its section 7508A authority for those individuals and businesses located in areas designated by the Federal Emergency Management Agency (FEMA) as federally declared disaster areas. The current qualifying areas include: Fresno, Los Angeles, Madera, Mendocino, San Bernardino, San Diego and Siskiyou counties in California. Taxpayers in locations that may be added later will also qualify for automatic relief. For updates, please check the IRS disaster relief site. 

Please note that this filing extension relief is separate from the relief provided for the Northern California wildfires that began on August 14. The relief previously granted for those fires has since been expanded to include the following areas:  Butte, Santa Clara, Lassen, Tulare and Trinity counties. This week’s announced relief applies only to the affected taxpayers who had a tax return filing or payment deadline starting on Sept. 4, 2020 through the Jan. 15, 2021 extended due date granted by this relief. Therefore, individuals and calendar-year corporations having valid Oct. 15, 2020 extensions to file their 2019 returns, will now have until Jan. 15, 2021, to file. However, because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief.

The Jan. 15, 2021 extended deadline also applies to quarterly estimated income tax payments due on Sept. 15, 2020, and the quarterly payroll and excise tax returns normally due on Nov. 2, 2020. It also applies to tax-exempt organizations, operating on a calendar-year basis that had a valid extension due to run out on Nov. 16, 2020. 

In addition, penalties on payroll and excise tax deposits due on or after September 4 and before September 21, will be abated as long as the deposits were made by Sept. 21, 2020.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. However, the IRS advises taxpayers who receive penalty notices and who otherwise qualify for relief to call the number on the notice to request abatement. 

The IRS will also provide relief to any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. This relief is not automatic, however, so taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227.