SEATTLE - The Internal Revenue Service today announced special tax relief for Alaska residents in the Presidential Disaster Area damaged by winter storms and flooding during the period October 23 through November 12, 2002.
The disaster area includes Kenai Peninsula Borough, Kodiak Island Borough, and Chignik Bay areas, including Chignik Lake and Chignik Lagoon.
For the purposes of this tax relief, affected taxpayers include individuals and businesses located in the disaster area, those whose tax records are located in the disaster area, and relief workers.
Affected taxpayers have the option of claiming disaster-related casualty losses on either their 2001 or 2002 federal income tax returns. Amending a 2001 return will get the taxpayer an earlier refund, but waiting to claim the loss on the 2002 return could result in a greater tax saving, depending on other income factors.
Individuals may deduct personal property losses that are not covered by insurance or other reimbursements, but they must first subtract $100 for each casualty event and then subtract ten percent of their adjusted gross income from their total casualty losses for the year. For details on figuring a casualty loss deduction, see IRS Publication 547, “Casualties, Disasters and Thefts.”
Affected taxpayers amending a 2001 return to claim the disaster loss should put the words “Severe Winter Storms/Flooding” in red ink at the top of the form so that the IRS can expedite the processing of the refund.
The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers who need them to apply for benefits or to file amended returns claiming casualty losses. Such taxpayers should put “Severe Winter Storms/Flooding” in red ink at the top of Form 4506, “Request for Copy or Transcript of Tax Form,” and submit it to the IRS.
Although the IRS is not granting additional time to file returns or pay taxes, it will consider requests for penalty abatements based on reasonable cause. The IRS cannot abate interest charges on late payments. Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain that the disaster impacts them so that the IRS can provide appropriate consideration to their case.
The IRS toll-free number for general tax questions is 1-800-829-1040.
On the Web:
Peninsula Clarion © 2016. All Rights Reserved. | Contact Us