Tax Lawyer Blog

A Blog written by the Tax Attorneys for Individuals and Businesses

Tax Extensions Available to Victims of California Wildfires

Earlier today, the IRS announced that victims of the California wildfires have been granted extensions to file certain individual and business tax returns.

Tax filing extensions

Most tax filings and payments due as of October 16, 2017 have been extended to January 31, 2018. This includes:

  • Quarterly estimated tax payments (including those due January 16, 2018)
  • Tax exempt organization returns with extensions that expire November 15, 2017
  • Quarterly payroll and excise tax returns normally due October 31st

The IRS is also waiving late-deposit penalties for federal payroll and excise taxes due from October 8 -23, so long as payments are made by October 23rd.

Taxpayers who received an extension to file their tax return until October 16, 2017 also have until January 31, 2018 to file (note that since payment was due last April, there is no tax relief available for payment).

Who qualifies?

Individuals and businesses in the California Counties of Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba qualify for this tax relief, and the IRS may extend it to other localities. Firefighters and relief workers working with a recognized government or charitable organization, regardless of where they live, also qualify for the extension.

The tax relief should be automatic

This tax relief should be automatically applied to you if you reside in the areas listed above, and there is no need to contact the IRS. However, if for some reason you receive a late filing or late penalty notice from the IRS, you should call the number on the notice to have the penalty removed.

If you do not live in one of the areas listed above, but have tax records located there, or are a firefighter or relief worker and cannot file on time, there may be relief available.

In our next post, we will cover disaster-related casualty losses and federal disaster grants. In the meantime, here are links to IRS information and publications relating to disaster relief for individuals and businesses:

Making an Effective (and Tax Deductible) Donation for Disaster Relief

Relief efforts are underway to assist victims of Hurricane Harvey and those affected by the catastrophic flooding in Texas and Louisiana. Many well-meaning Americans are making donations through a variety of organizations. Most of the donations will provide much-needed assistance, but a lot of it won’t. In this post, we focus our attention on how to make effective, tax-deductible donations for disaster relief.

Donate through a qualified charity

Although donating through a 501(c)(3) charitable nonprofit organization is hardly a guarantee for proper management, it does provide assurance that there is at least some degree of oversight and accountability. It also allows you to deduct the amount of your gift from that year’s taxes. 26 U.S. Code § 501(c)(3). Make sure that you get an acknowledgment letter from the organization with its 501(c)(3) number (note that churches and other religious organizations are not required to apply for 501(c)(3) status). Also, keep in mind that there are charitable organizations to which contributions are not deductible (e.g., 501(c)(4) social welfare and civic organizations). Further, most contributions to foreign charitable organizations are not deductible. See Internal Revenue Service (IRS) Publication 78.

Do your research

Even valid charities have issues. In our 2015 blog post on charity scams, we mentioned how important it is to research the activities of the charities to which you donate, and follow up on the outcomes of their efforts.

Donate only what is needed

After the 1998 Honduras earthquake, an airplane filled with desperately needed supplies for the tens of thousands who were without food, shelter and clean water was unable to land because excess donations of clothing (including winter coats!) were left on the runway.

In 2012, an estimated 65,000 teddy bears were donated to Sandy Hook Elementary School – nearly three times the entire population of Newtown, Connecticut.

For both practical and tax reasons, usually the best thing to donate is money. Unless specifically requested, volunteers can be more of a hindrance than a help to relief organizers – and your time is not tax deductible. In nearly every case, cash donations are far more useful because they allow local relief organizations to purchase necessary items.

Ask first!

In the modern digital age it isn’t hard to make online inquiries with people affected by the disaster to find out what is really needed in their community. After all, donating shouldn’t be about what we want to give– it should be about getting people what they need.