Tax Update Blog: Katrina Archives

CONGRESS PASSES FIRST ROUND OF HURRICANE TAX RELIEF

September 22, 2005

Congress yesterday sent to the President H.R. 3768, the first tax relief legislation resulting from Hurricane Katrina.

Provisions include:

- Debt forgiveness income resulting from the hurricane - for example, a cancelled morgage, will not be taxed if cancelled before 2007.

- The 10% of AGI and $100 floor on deductions for casualty losses will be waived for Katrina losses.

- The 10% tax on early IRA and pension distributions will be waived for distributions up to $100,000 for families in the disaster area; tax can be distributed over three years, or waived if the amount is repaid to the account within three years.

- The IRS deadline extension to January 3, 2006 for post 8/29/05 filing deadlines is extended to February 28, 2006. The extension also applies to excise and employement taxes, as well as income and estate and gift taxes.

- Employment-related tax credits will be available through 2005 for employees hired in the disaster area through year-end.

The House Ways and Means Committee has a more complete summary that includes several additional provisions. For a thorough discussion of the provisions, go visit Professor Maule.

Congress is trying to help, but there are a lot of people already down in the disaster area doing great things. Give generously to The Salvation Army, the American Red Cross, or one of the other fine agencies that have been helping out since the winds stopped blowing.

LINK:TAX UPDATE IRS KATRINA RELIEF SUMMARY PAGE

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IRS WEB SITE CONSOLIDATES KATRINA GUIDANCE

September 21, 2005

The IRS has linked all of its releases and announcements related to the hurricane at thier new Katrina News Releases & Legal Guidance page.

LINK: TAX UPDATE IRS KATRINA RELIEF SUMMARY PAGE

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IRS ALLOWS KATRINA WITHDRAWALS FROM RETIREMENT PLANS

September 16, 2005

The IRS has granted qualified plans blanket permission to make hardship distributions or loans to disaster-area residents (Announcement 2005-70). The relief also applies for those with relatives affected by the disaster, per the announcement:

A qualified employer plan will not be treated as failing to satisfy any requirement under the Code or regulations merely because the plan makes a loan, or a hardship distribution for a need arising from Hurricane Katrina, to an employee or former employee whose principal residence on August 29, 2005, was located in one of the counties or parishes in Louisiana, Mississippi or Alabama that have been or are later designated as disaster areas eligible for Individual Assistance by the Federal Emergency Management Agency because of the devastation caused by Hurricane Katrina or whose place of employment was located in one of these counties or parishes on such date or whose lineal ascendant or descendant, dependent or spouse had a principal residence or place of employment in one of these counties or parishes on such date. Plan administrators may rely upon representations from the employee or former employee as to the need for and amount of a hardship distribution, unless the plan administrator has actual knowledge to the contrary, and such distribution is treated as a hardship distribution for all purposes under the Code and regulations.

The Tax Prof has posted a comprensive set of Katrina relief links.

Don't forget the Katrina Benefit tonight at Biaggi's in West Des Moines.

LINK: Tax Update Summary of Katrina relief.

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KATRINA RELIEF PASSES SENATE

September 16, 2005

The Senate yesterday passed its version of short-term tax relief to deal with the Katrina disaster. Tax Analysts summarizes the provisions of the Senate version of H.R. 3768:

* hold families harmless against the loss of tax benefits due to temporary relocations and allow individuals to use their 2004 income to determine the child credit and the earned income tax credit on their 2005 returns;
* provide to taxpayers who house displaced individuals an additional personal exemption of $500 per displaced person;
* extend the work opportunity tax credit to employers that hire displaced storm victims;
* provide to employers located in the disaster zone a 40 percent tax credit for wages (up to $6,000) paid to employees through the remainder of 2005;
* waive the 10 percent tax on early distributions from IRAs and pensions for individuals affected by the hurricane;
* exempt from income tax storm victims' debts discharged by commercial lenders;
* allow full deductibility of personal casualty losses for hurricane victims;
* extend the replacement period for homes and businesses damaged by the hurricane;
* relax some restrictions on mortgage revenue bonds;
* raise the permitted charitable contribution level for corporations and individuals;
* increase the charitable mileage reimbursement rate;
* enhance the deduction for charitable donations of food and books; and
* extend tax filing deadlines and waive penalties and interest that would have applied on income, estate and gift, employment, and excise taxes for at least six months.

This is similar to the House-passed version of the bill, so the final bill will look much like this.

WHAT ABOUT ROUND TWO?

This is only the first round of Katrina tax provisions. Another bill will put in longer-term reconstruction incentives, perhaps including a $200,000 Section 179 deduction and restored bonus depreciation for the disaster area proposed last night by the President.

LINKS:

Tax Analysts free coverage

Joint Committee on Taxation explanation of House-passed bill

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KATRINA BASH TOMORROW IN WEST DES MOINES

September 15, 2005

You can have a good time and do a good deed tomorrow at the "After the Storm" benefit at Biaggi's. Details are below. Contact Rebecca Kavanagh for more information.

POWER TOOLS!

If you can't make the party, just click the links and give to the American Red Cross, The Salvation Army, or another fine relief charity.

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KATRINA AID WORKERS GET EXTENSIONS

September 15, 2005

The IRS will give Katrina aid workers the same automatic extension of return payment and filing deadlines already available for residents of the disaster area. This means aid workers - relief workers assisting in the disaster area - have until January 3 to pay amounts otherwise due since August 29. This includes third quarter payments due today and extended 1040s due October 15. (IR 2005-103)

LINK: Summary of Katrina relief.

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WILL KATRINA BLOW AWAY YOUR TAX TROUBLES?

September 12, 2005

If you were hoping that the IRS would forget about your taxes because of the hurricane, don't count on it.

The IRS has given taxpayers from the Katrina disaster area extensions for filing returns and making tax payments. Now they have also given themselves until January 3, 2006 to do things they would otherwise have to do before then (Notice 2005-66). For example, deadlines for deficiency notices, assessments and lawsuits are extended for that period.

LINK: Summary of IRS Hurricane Relief.

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KATRINA TAX UPDATE: SEPTEMBER 9, 2005

September 09, 2005

The IRS has now given taxpayers in the Katrina disaster area until January 3, 2006 to pay taxes and file returns due starting August 29 through January 2. Among other items, this covers third quarter individual and corporate estimates; corporate extended returns due September 15; individual extended returns due October 15; and corporate estimated tax payments due December 15. (IR 2005-96)

LEAVE-SHARING.The IRS has also announced that "leave-donation" programs will be tax-preferred. This covers arrangements where employees give up accrued vacation in exchange for the employer making a cash payment of accrued vacation pay to charity (IR 2005-97; Notice 2005-68). The payments will be deductible to the employer without being subject to employment taxes; the employee will not pick up the payments in income. This only covers payments for Katrina relief, and only if the payments are remitted to charity before January 1, 2007

Taxation of disaster relief payments is covered in this comprehensive summary of Katrina and taxes provided by CCH (via TaxGuru.net).

THEY STILL NEED HELP. Consider gifts to the Salvation Army, the Red Cross, or other worthy charities.

LINK: Summary of IRS Hurricane Relief

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KATRINA TAX UPDATE: SEPTEMBER 8, 2005

September 08, 2005

Congress is beginning to consider the shape of tax incentives it may enact in response to the Katrina disaster. Ideas floated by Congressional Democrats so far include:

* provide half a dependency deduction (for each Hurricane Katrina survivor) to taxpayers that house for at least 90 days those displaced by the storm;

* exempt from taxable income education expenses for students displaced by Hurricane Katrina;

* extend the work opportunity tax credit to employers that hire workers displaced by the hurricane; and

* provide a 50 percent tax credit, up to $12,000, to employers with fewer than 50 employees that continue paying employees during the hurricane rebuilding phase.

Republicans seem to lean more towards the something like accelerated depreciation and expensing provisions for rebuilding that were enacted for areas affected by the September 2001 terror attacks.

Meanwhile, your help is still needed. Give generously to the Salvation Army, the Red Cross, or one of the worthy charities here.

DES MOINES READERS! A friend forwards the following request:

We have friends who are displaced from New Orleans. They moved from West Des Moines to New Orleans in August for Carlo's job with an insurance company. Jan and the boys (Paul and Kevin) are now back in West Des Moines and Carlos is staying in Baton Rouge to work with other displaced co-workers. The boys have started back at their old schools (Indian Hills and Westridge in West Des Moines). They are living with us while they look for housing. They are looking for a 3 bedroom condo, house or town home they can rent, preferably in WDM. They do have a well-behaved indoor dog. If anyone has any suggestions or ideas, please let me know. They are glad to be safe, but exhausted from the stress. They have very few belongings with them.

If you know of a place for these folks, send me an email, and I will pass it on.

LINK: Summary of IRS Hurricane Relief

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PORK DREAMS

September 08, 2005

For those who say the federal government is starved for resources to deal with the aftermath of Katrina, consider this:

One way to show such sacrifice and resolve would be to agree to shift at least half of the $25 billion dollars that the recently enacted highway bill (SAFETEA-LU) dedicates to frivolous pork barrel spending in local communities around the nation. As Mississippi and Louisiana confront the replacement of dozens of wrecked bridges, is it possible that Rep. Don Young (R-AK) could give up one of the two $200 million dollar bridges he secured for his state? Perhaps Alaskans could go without the one that will serve a town of just fifty people, who now ride a ferry?

And that's just one highway bill. (Via Instapundit)

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KATRINA TAX UPDATE: SEPTEMBER 7, 2005

September 07, 2005

Gifts for Hurricane Katrina relief are reported to be at $465,769,985, give or take a few million. Assuming a 28% tax rate (heck, everyone pays alternative minimum tax nowadays, right?), that means the IRS is out $130,415,596 or so, so far. Good work, folks!

But now's not the time to stop. Give generously to the Salvation Army, the Red Cross, or one of the worthy charities here.

IRS UPDATE: The IRS has announced that it is speeding up the process for approving applications for charitable entity status as a result of the Katrina disaster. They still encourage gifts to established charities.

LINK: Summary of IRS Hurricane Relief

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EXTORTIONATE CAB FARE: DEDUCTIBLE?

September 07, 2005

Enigmatic hydra-headed blogger State 29 asks:

Do you think, considering that cab drivers were allegedly charging $1000 to drive 15 miles to the airport prior to the arrival of what was then-thought to be a Category 5 hurricane, that the IRS would allow that sort of business deduction?

The tax law allows deductions for "ordinary and necessary" business expenses. Because travel expenses are ripe for abuse --e.g. that "business vacation" with your girlfriend to Las Vegas to evaluate hotel and casino stocks -- the tax law imposes additional requirement for deducting travel expenses. As Biitker and Lokken explain in their treatise:

For most deductions and credits subject to § 274(d), the taxpayer is required to substantiate, by adequate records or sufficient evidence corroborating the taxpayer's own statement, four aspects of the deducted or credited item: (1) its amount; (2) the time and place of the travel, entertainment, or use of the facility or the date and description of the gift; (3) the business purpose of the item; and (4) the business relationship between the taxpayer and the persons entertained, using the facility, or receiving the gift

We can assume that the extortionate (ok, market-clearing) cab fare meets the "ordinary and necessary" test, assuming the taxpayer was in New Orleans on business in the first place. It would take a judge with a heart (or brain) of stone to deny that any amount paid to get out of New Orleans last week was "ordinary and necessary."

Substantiation might be a bigger problem. Under the circumstances, the cab driver might be reluctant to accept anything but cash -- knowing that an ungrateful refugee might attempt to cancel the charge with the credit card company. With other $1,000 fares awaiting his services, he may not choose to linger long enough to write a receipt.

Fortunately, the tax law has an out that seems to apply -- Regulation Sec. 1.274-5T(c)(4):

   Substantiation in exceptional circumstances.  If a taxpayer 
   establishes that, by reason of the inherent nature of the 
   situation—

     (i) He was unable to obtain evidence with  respect to an element 
   of the expenditure or use which conforms fully to the “adequate 
   records” requirements of paragraph (c)(2) of this section, 

     (ii) He is unable to obtain evidence with respect to such 
   element which conforms fully to the “other sufficient evidence” 
   requirements of paragraph (c)(3) of this section, and 

     (iii) He has presented other evidence, with respect to such 
   element, which possesses the highest degree of probative value 
   possible under the circumstances, such other evidence shall be 
   considered to satisfy the substantiation requirements of section 
   274(d) and this paragraph. 

Under the circumstances, if the traveler has made a note somewhere of how much he paid the cab driver, the deduction should pass muster. But short of a hurricane, don't skimp on travel substantiation.

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KATRINA AND TAX POLICY

September 06, 2005

Hurricane Katrina is an overwhelming event. We shouldn't be surprised that people who make a living doing tax policy see tax policy lessons in the disaster. And we should never underestimate the ability of a disaster to cause muddled thinking.

The past week has seen some odd statements on the estate tax. An estate tax repeal vote had been slated for this week, though a delay seems likely now. Grover Norquist, the dodgy disciple of estate tax repeal, waded in with:

The 2003 tax cut lifted economic growth far beyond what most people expected. We know repeal of the Death Tax will also have a similar effect. And higher levels of economic growth is exactly what the residents of the Gulf Region need at this time to start the rebuilding process for their neighborhoods and more importantly for their lives.

Meanwhile, Stuart Levine at Tax and Business Law Commentary says

The estate tax repeal is dead because suddenly Americans have suddenly awoken to the reality that government and taxes are necessary and that there's no free lunch.

In real life, of course, a hurricane should have no bearing on the proper means of financing government activity. No serious person should argue that a repeal of the estate tax would mean much to the devastated region. Nor should any serious person say that Katrina shows that the government lacks the resources to do what it should do, in the wake of last's months obscenely-bloated highway bill. And the estate tax repeal was dead before Katrina, for various reasons having nothing to do with broken levees.

Maybe Katrina changes everything. Maybe Congress will repeal the $380 billion pork-barrel highway bill and reconsider whether those resources would be better spent dealing with the lower Mississippi flood issues that have been accumulating for over a hundred years. Maybe people will focus on what the priorities of the government should be, and stand up against $223 million bridges from Nowhere, Alaska to Oblivion, Alaska, to ensure that the money goes to more pressing long-term needs. And maybe this thoughtful discussion will be matched by a careful consideration of the way to structure a tax system that will meet those needs. And that free bubble-ubb will taste delicious.

In the real world, expect Katrina to move politicians to pass misguided tax breaks and establish big new bureaucracies to manage the big bureaucracies that were found wanting last week. And in two years another big bloated highway bill will pass, and politicians will praise the bill for its new highways while more urgent but less sexy infrastructure is neglected.

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HURRICANE TAX RELIEF SUMMARY

September 04, 2005

The IRS has invoked its disaster relief powers to waive tax rules for the areas affected by the Katrina disaster.

RETURN DEADLINE RELIEF

All tax returns and payments due from August 29 through October are extended automatically to October 31 for taxpayers in the "affected area" of Hurricane Katrina; the counties in the affected area are listed below. This includes 3rd quarter individual and corporate estimated tax payments otherwise due September 15, as well as double-extended 1040s. (IR-2005-84; IR-2005-91.)UPDATE:The IRS has now extended the due dates for all returns and payments due until January 3, 2006, amounts due before that date. (IR 2005-96) UPDATE, SEPTEMBER 22, 2005: Congress has passed legislation extending the deadlines to February 28, 2005. More on the congressional action here.

EMPLOYMENT AND EXCISE TAX PAYMENT RELIEF

Taxpayers in the affected area with employment tax and excise tax deposits otherwise due August 29 through September 23 have until October 31 to make the deposits.

COLLECTION AND ENFORCEMENT SUSPENDED

The IRS has suspended "many" of its compliance and enforcement activities in the affected area for 60 days.

FURTHER EXTENSIONS LIKELY

The IRS says it expects to extend these extensions and enforcement moratoriums for the hardest-hit areas.

DISASTER FAQS: The IRS has set up a "frequently answered questions" page regarding disaster-related tax issues.

COUNTIES AFFECTED (updated 9/22/05 per Notice 2005-73)

(Taxpayers should mark the top of any late filings eligible for relief with the words "Hurricane Katrina" in red).

Louisiana

Taxpayers will receive automatic relief in 31 Louisiana parishes designated for individual assistance: Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Pointe Coupee, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Mary, St. Martin, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge and West Feliciana

Taxpayers will receive tax relief if they identify themselves as being impacted by Hurricane Katrina and they live in these 33 Louisiana parishes designated for public assistance: Allen, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Caldwell, Catahoula, Claiborne, Concordia, Desoto, East Carroll, Evangeline, Franklin, Grant, Jackson, LaSalle, Lincoln, Madison, Morehouse, Natchitoches, Ouachita, Rapides, Red River, Richland, Sabine, St. Landry, Tensas, Union, Vernon, Webster, West Carroll and Winn.

Mississippi

Taxpayers will receive automatic relief in 47 Mississippi counties designated for individual assistance: Adams, Amite, Attala, Claiborne, Choctow, Clarke, Copiah, Covington, Franklin, Forrest, George, Greene, Hancock, Harrison, Hinds, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston and Yazoo.

Taxpayers will receive tax relief if they identify themselves as being impacted by Hurricane Katrina and they live in these 35 Mississippi counties designated for public assistance: Alcorn, Benton, Bolivar, Calhoun, Carroll, Chickasaw, Clay, Coahoma, DeSoto, Grenada, Holmes, Humphreys, Issaquena, Itawamba, Lafayette, Leflore, Lee, Marshall, Monroe, Montgomery, Panola, Pontotoc, Prentiss, Quitman, Sharkey, Sunflower, Tallahatchie, Tate, Tippah, Tishomingo, Tunica, Union, Washington, Webster and Yalobusha.

Alabama

Taxpayers will receive automatic relief in 10 Alabama counties designated for individual assistance: Baldwin, Choctaw, Clarke, Greene, Hale, Mobile, Pickens, Sumter, Tuscaloosa and Washington.

Taxpayers will receive tax relief if they identify themselves as being impacted by Hurricane Katrina and they live in these 12 counties eligible for public assistance: Bibb, Colbert, Cullman, Jefferson, Lamar, Lauderdale, Marengo, Marion, Monroe, Perry, Wilcox and Winston.

Florida

Taxpayers will receive tax relief if they identify themselves as being impacted by Hurricane Katrina and they live in these 11 Florida counties designated for public assistance: Monroe, Broward, Miami- Dade, Bay, Collier, Escambia, Franklin, Gulf, Okaloosa, Santa Rosa and Walton.

OTHER RELIEF

Several other relief provisions have been announced in response to the disaster. These include:

DISASTER HOT LINE: The IRS has set up a toll-free number (1-866-562-5227) to address disaster-related questions.

DIESEL FUEL EXCISE TAXES: A waiver of penalties for using dyed dieself fuel for highway use. This runs from August 25 in Florida; August 30 in Alabama, Louisiana and Mississippi; and August 31 in the rest of the country. The waiver period runs through September 15 (IR 2005-89)

RETIREMENT PLAN CONTRIBUTIONS: Employers in the affected area have until October 31 to make minimum funding contributions otherwise due from August 29 through October 30 (Notice 2005-60)

LOW-INCOME HOUSING: Landlords who qualify for low-income housing credits normally have to document the low-income status of their tenants to receive the credits. These rules have been waived to those providing housing for Katrina refugees (IR-2005-92)

IRS DISASTER WEB PAGE: The IRS has set up a web page for all of it's Katrina-related news.

CHARITY SEARCH PAGE: The IRS has a searchable web page of charities eligible to receive deductible contributions. If you don't know the charity well, this can help you avoid disaster scammers.

REFUNDS FOR DISASTER LOSSES: Taxpayers who suffer a deductible loss in the Katrina disaster area will be able to file amended returns to claim the loss in 2004. This will enable taxpayers to get the tax benefit of the losses right away, rather than having to wait until they file their 2005 returns. In general, these deductions are available for casualty losses not reimbursed by insurance. The deductible loss is the lesser of:

- The amount the disaster reduced the value of the property, or
- The excess of the property's basis (generally basis = cost) over its value after the disaster.

UPDATE: CHARITABLE EXEMPTION RELIEF: The IRS has announced that it is speeding up the process for approving applications for charitable entity status as a result of the Katrina disaster. They still encourage gifts to established charities.

LEAVE-SHARING.The IRS has also announced that "leave-donation" programs will be tax-preferred. This covers arrangements where employees give up accrued vacation in exchange for the employer making a cash payment of accrued vacation pay to charity (IR 2005-97; Notice 2005-68). The payments will be deductible to the employer without being subject to employment taxes; the employee will not pick up the payments in income. This only covers payments for Katrina relief, and only if the payments are remitted to charity before January 1, 2007

RELIEF FOR AID WORKERS (ADDED 9/15/05): The IRS will give Katrina aid workers the same automatic extension of return payment and filing deadlines already available for residents of the disaster area. This means aid workers - relief workers assisting in the disaster area - have until January 3 to pay amounts otherwise due since August 29. This includes third quarter payments due today and extended 1040s due October 15. (IR 2005-103)

RETIREMENT PLAN LOANS AND HARSHIP DISTRIBUTIONS: The IRS has granted qualified plans blanket permission to make hardship distributions or loans to disaster-area residents (Announcement 2005-70).

Taxation of disaster relief payments is covered in this comprehensive summary of Katrina and taxes provided by CCH (via TaxGuru.net).

UPDATE, 9/21/05:IRS WEB SITE CONSOLIDATES KATRINA GUIDANCE

The IRS has linked all of its releases and announcements related to the hurricane at thier new Katrina News Releases & Legal Guidance page.

GIVE GENEROUSLY: There is an enormous need for help. It behooves those of us fortunate enough to be high and dry to give generously to the Salvation Army, the Red Cross, or other worthy charities. If your employer matches contributions, be sure to have them kick in to the effort with you.

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KATRINA GIVING AND TAX RELIEF UPDATES

September 02, 2005

The need for help in New Orleans and other areas affected by the flood is tremendous. The Salvation Army and the American Red Cross, and many other worthy agencies, can put your generous gifts to good use. If you are an Amazon.com customer, you can use your "one-click" account to donate to the American Red Cross.

If you work for a matching gift company, be sure to get your gift matched. If you aren't sure whether you work for a matching gift company, you may be able to find out at the Matching Gifts Clearinghouse Company Search web site (thanks to Hank at the InsureBlog for the tip).

The blog-based charity "Strengthen the Good" has also set up its own gift matching program.

The IRS has opened a web page to deal with Katrina Disaster tax relief and giving issues. They have also opened a dedicated toll-free number for disaster tax questions (1-866-562-5227).

The IRS has also issued a reminder that they have a searchable web site to determine whether a charity qualifies for deductible donations.

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KATRINA DISASTER: HOW TO HELP

September 01, 2005

While it will take a long time to measure the amount of damage caused by Hurricane Katrina, it is clear that it is beyond anything seen in our lifetimes in the U.S. Today the Blogosphere is conducting a "blogburst" to encourage donations to help those affected.

For our part, we suggest you consider a generous donation to the Salvation Army or the American Red Cross. You may donate online by clicking one of the links below.

The Salvation Army

The American Red Cross

For you Sertoma Club members, the Sertoma Foundation is also accepting checks for disaster relief at:

Sertoma Foundation
Attention: Katrina Hurricane Fund
1912 East Meyer Blvd
Kansas City, MO 64132

Instapundit has an extensive list of charities helping with the relief effort.

Also, be careful. Many scammers will surely try to use the Katrina disaster to set up scams. Know who you are dealing with before you give them money.

UPDATE: Stephanie makes an excellent suggestion in the comments:

Also! Check to see if your company matches charity donations, find out how to do it, THEN send in your money, you may be able to send in your forms post-donation, but it will likely be a lot more difficult.

What she said. Thanks, Stephanie.

Link: Information on IRS deadline relief for taxpayers affected by Katrina

Technorati Tags: flood aid, Hurricane Katrina

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KATRINA RELIEF

August 31, 2005

If you are sitting on your roof waiting for a boat, even the IRS can see you probably can't file your September 15 returns on time. The IRS has automatically extended all September 15 and October 15, 2005 return due dates to October 31 for areas affected by the storm.

In addition, the IRS has waived penalties for employment and excise tax deposits due from August 28 - September 23, if the payments are made by October 31

To claim the relief, taxpayers should mark late-filed returns in red on top with the words "Hurricane Katrina."

The disaster relief currently covers the following:

• 31 Louisiana parishes: Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Pointe Coupee, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Mary, St. Martin, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge and West Feliciana;

• 15 Mississippi counties: Amite, Forrest, George, Greene, Hancock, Harrison, Jackson, Lamar, Marion, Pearl River, Perry, Pike, Stone, Walthall, and Wilkinson; and

• Three Alabama counties: Baldwin, Mobile and Washington.

The relief is likely to be extended to additional areas. Considering the nature of the devastation, additional extensions of time may be granted for parts of the affected area.

Links: IR 2005-84, a summary of tax relief for affected taxpayers.

Details of relief offered.

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YIKES

August 28, 2005

We interrupt our regularly-unscheduled weblog for this bulletin:

Unless there is a miracle, a disaster slow-approaching yet inexorable will wreak havoc on a scale not seen in the United States for decades. People alive today will be dead soon, and New Orleans as we have known it will no longer exist by Tuesday.

Have a nice day.

Link:What the "big one" would do to New Orleans.

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