Lawmakers in the House and Senate have reintroduced bipartisan legislation backed by the American Institute of CPAs to provide faster tax filing relief to taxpayers affected by natural disasters.
Currently, the Internal Revenue Service has the authority to postpone tax-filing deadlines to taxpayers affected by federally declared disasters, but that authority doesn’t extend to state-level emergencies. The Filing Relief for Natural Disasters Act would authorize the IRS to extend relief to impacted taxpayers as soon as the governor of a state declares a disaster or state of emergency. The legislation would also expand the current mandatory extension following a federally-declared disaster declaration from 60 to 120 days.
The bill was introduced last week in the House by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California, and in the Senate by Sen. Catherine Cortez Masto, D-Nevada, John Kennedy, R-Louisiana, Chris Van Hollen, D-Maryland, and Marsha Blackburn, R-Tennessee. The bill has been introduced during successive congressional terms
“Over the past week, my district has been devastated by the Eaton Fire, which has taken lives, destroyed 7,000 structures, left 20,000 people homeless, and burned countless businesses and community institutions to the ground,” Chu said in a statement. “Thankfully, the administration issued a federal major disaster declaration for the fires across Los Angeles County, which enabled the IRS to quickly extend federal filing deadlines for victims and provide needed relief. But for many disasters, federal declarations may come days or even weeks after the state declaration, leaving open the question of whether the IRS will be able to give disaster victims timely filing relief. The Filing Relief for Natural Disasters Act is a common-sense, bipartisan solution to this problem that will give the IRS the authority to bypass bureaucratic delays and immediately extend tax filing deadlines after state-declared disasters and states of emergency.”
“Families and businesses across the nation are the victims of national disasters. Many in Tennessee are still grappling with the devastating aftermath of Hurricane Helene,” said Kustoff in a statement. “It is essential that the federal government provides the support and resources that these individuals need. That is why I introduced the Filing Relief for Natural Disasters Act, which would postpone tax filing deadlines to taxpayers affected by state-declared disasters. This legislation will give families the flexibility they need to rebuild and recover.”
The bill would amend the Tax Code to allow state-declared disasters to trigger a postponement of certain filing and payment deadlines, at the discretion of the IRS. The AICPA has long supported successive versions of the legislation whenever it’s been introduced, but pointed out that it doesn’t eliminate the need for Congress to implement a permanent disaster tax relief bill, for which the accounting profession has long advocated, so taxpayers are assured fair treatment in a timely manner.
“There are many types of disasters that impact taxpayers across the country and throughout the year,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “Waiting for the IRS to issue relief causes taxpayers and tax practitioners unnecessary stress and burden when their homes, offices and records may have been destroyed or are inaccessible. We are grateful to Reps. Kustoff and Chu and Sens. Cortez Masto, Kennedy, Van Hollen and Blackburn for their leadership on this important issue, and we urge Congress to approve this legislation so that the IRS is allowed to offer disaster victims the certainty they need quickly.”
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