BSW Tax Blog

Lance J. Kinchen
lance.kinchen@bswllp.com

On September 5, 2012, following recent disaster declarations by the Federal Emergency Management Agency, the IRS announced that affected taxpayers in Louisiana and Mississippi will receive some tax relief.

Following Hurricane Isaac, the President declared the following parishes a federal disaster area:  Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington and West Feliciana.

As a result, the IRS has postponed certain deadlines for taxpayers who reside or have a business in the designated disaster area.  Under §7508A, the IRS has given affected taxpayers until January 11, 2013 to file most tax returns or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after August 26, 2012 and on or before January 11, 2013.  This includes the quarterly estimated tax payment due on September 17, 2012.  Furthermore, it includes corporations and businesses that previously obtained an extension until September 17, 2012 to file their 2011 returns and individuals and businesses that received a similar extension until October 15.

The IRS will abate any interest, late payment or late filing penalties that would otherwise apply.  In addition, the IRS is waiving failure-to-deposit penalties for federal employment and excise tax deposits normally due on or after August 26 and before September 10 if the deposits are made by September 10, 2012.

The Louisiana Department of Revenue (“LDR”) is granting similar state tax relief to affected taxpayers.  In addition to the parishes listed above, LDR has also granted state tax relief to East Baton Rouge, East Feliciana, Pointe Coupee, West Baton Rouge and West Feliciana.  LDR will waive any late filing penalties, late payments penalties and interest that would otherwise apply.  Any return or amount on which penalties or interest begin accruing before August 26, 2012 will not be eligible for this relief.

As a result, affected individuals and businesses will have until February 11, 2013 to file these state returns and pay any state taxes due.  This includes individuals and corporations that previously obtained an extension until November 15, 2012, to file their 2011 income tax returns.  It also includes the state estimated tax payment for the third quarter of 2012, due September 17, 2012.

Please consult your CPA or tax advisor on whether you qualify for such tax relief.