IRS to Help Some Illinois Flood Victims

Various forms of disaster tax relief may be available to residents and business in Iroquois and Livingston counties in Illinois. Those who suffered losses in the severe storms and flooding between Jan. 7 and March 14 can elect to deduct those losses on their tax returns for 2007 rather than wait to deduct the losses on their 2008 returns. The IRS will postpone certain deadlines for taxpayers who reside or have a business in the disaster area until May 6. The postponement applies to return filing, tax payment and certain other time-sensitive acts otherwise due between Jan. 7 and May 6. In addition, the IRS will waive failure to deposit penalties for employment and excise deposits due on or after Jan. 7 and on or before Jan. 22, as long as the deposits were made by Jan. 22. The Internal Revenue Service has a Disaster Assistance Hotline 1-866-562-5227 available Monday through Friday from 7 a.m. to 10 p.m. (CST). IRS representatives are available to help those affected by the floods deduct their storm-related losses. If the taxpayer already filed their 2007 federal income tax return, a copy of that return will likely be necessary when calling the IRS hotline for assistance.

Some Tax Relief for Calif. Fire Victims

California residents whose properties were damaged by October and November wildfires may be eligible for disaster tax relief from the Internal Revenue Service (IRS), the California Franchise Tax Board (FTB) and the California State Board of Equalization (BOE). The IRS and the FTB have announced that affected taxpayers in Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara, and San Diego counties have been granted an extension to file or pay most tax returns, including individual tax returns and employment tax returns. Additionally, the BOE has announced that property tax relief may be available for those with taxable property that has been damaged or destroyed. Applications for reduced assessment are available from and must be filed with the county assessor. In a special provision of the tax codes, taxpayers have the option of claiming disaster-related losses either on this year's (2007) or the preceding year's (2006) federal (IRS) and state (FTB) income tax return. According to the Franchise Tax Board (FTB Pub. 1034A-11), claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year's return could result in a greater tax saving, depending on other income factors. For more information about how disaster losses affect taxes, refer to Disaster Loss (FTB Pub. 1034) at www.ftb.ca.gov or 1-800-338-0505, the IRS 547, Casualties, Disasters, and Thefts at www.irs.gov or 1-800-TAX-FORM (1-800-829-3676), or BOE at www.boe.ca.gov or 1-800-400-7115.