About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Income Tax Relief in Times of Disaster, February 17, 2006 1 (February 17, 2006)

handle is hein.tera/crstax0098 and id is 1 raw text is: Order Code RS22249 Updated February 17, 2006 CRS Report for Congress Received through the CRS Web Income Tax Relief in Times of Disaster Pamela J. Jackson Analyst in Public Sector Economics Government and Finance Division Summary Income tax relief in times of disaster is varied, but typically includes several key provisions in the federal tax code. These provisions include a deduction for casualty losses, the postponement of filing deadlines, and the abatement of interest and/or fees. Generally, individuals and businesses can claim an income tax deduction for casualty losses. When the casualty losses occur in a presidentially declared disaster area special tax provisions come into play. For example, taxpayers can shorten the amount of time it takes to receive an income tax refund by filing an amended tax return for the previous tax year to claim losses from the disaster. Another special tax rule allows for the deferral of capital gain from involuntary conversions of assets. Taxpayers in a presidentially declared disaster area who receive grants from FEMA, state programs, charitable organizations, or employers to cover medical, transportation, or temporary housing expenses are able to exclude these grants from taxable income. Most recently, in response to hurricanes in the Gulf region (Katrina, Wilma, and Rita), Congress enacted additional tax relief. H.R. 3768, the Katrina Emergency Tax Relief Act of 2005, became P.L. 109-73 on September 23, 2005, and H.R. 4440, the Gulf Opportunity Zone Act of 2005, became P.L. 109-135 on December 22, 2005. The new laws expand existing tax relief for victims of the hurricanes. This report will be updated as warranted by legislative events. Special tax law provisions are designed to help taxpayers recover financially from the impact of a disaster. Although recent legislative attention has focused on the hurricanes of the fall of 2005, other disasters have included storms and floods, land and mud slides, wildfires, and tornados. In many cases these disasters result in a presidential declaration of disaster that affords victims special benefits and incentives to assist in the recovery. Specifically, areas declared by the President of the United States to warrant federal assistance as the result of a disaster are designated as presidentially declared disaster areas. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Individuals and businesses in a presidentially declared disaster area Congressional Research Service oe The Library of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most