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Natural Disasters And Tax Consequences: Individuals And Businesses Take Note

By Sidney Kess
New York Law Journal
April 26, 2023

It seems that natural disasters are occurring more frequently. Both the East Coast and West Coast have recently been devastated by various storms, and some central states have been hit by tornadoes. The IRS has already noted 14 federal disasters in 2023—including tornados, mudslides, winter storms, severe rains and flooding. When this happens, there are tax consequences to individuals and businesses.

Filing Deadlines

Under the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (P.L. 116-94), there is an automatic 60-day extension for filing tax returns for those affected by a disaster, including individuals who reside in a disaster area, those injured or killed by the disaster, businesses that have a principal place of business in a disaster area, relief workers who provide assistance in a disaster area, or any taxpayer whose tax records necessary to meet a tax deadline are located in a disaster area (Code Sec. 7508A). Regulations clarify that the 60-day period begins at the start of the incident period (e.g., when a storm begins) and ends 60 days after the last day of the incident period (e.g., when the storm ends) (T.D. 9950, 6/11/21).


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