Tax return deadlines for taxpayers residing in affected counties have been suspended for the period beginning October 21, 2007 through January 31, 2008. In addition, the IRS waived the failure to deposit penalty for employment and excise deposits that were due after October 21, 2007 and before November 5, 2007, as long as the deposits were made by November 5, 2007. If any affected taxpayers received penalty notices related to these dates, they should call the IRS telephone number on the notice and the IRS will excuse the interest and penalties for that period only.

The IRS will give affected taxpayers additional time to file most tax returns (including individual, corporate, estate, trust, partnership, employment, and certain excise tax returns) or to make tax payments, including estimated tax payments, that either have an original or extended due date falling on or after October 21, 2007 and before January 31, 2008.

Note that the relief provisions do not extend to information returns deadlines including forms W-2, 1098, 1099, or 5498.

Affected taxpayers who suffered a casualty loss related to the wildfires have the option of reporting the casualty loss in either the current tax year or the prior tax year. If the prior tax year’s return has been filed, it may be amended to include the casualty loss. Amending a 2006 tax return will allow the refund to be received quicker than waiting to file a 2007 tax return; however it may be in the taxpayer’s best interest to wait and report the loss on the 2007 return if it generates a larger 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 write “2007 Southern California Wildfires” in red ink at the top of form 4506 to request expedited transcripts.

Please call our office if you have any questions related to these provisions, or if we can help in any way with your situation.