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Rhode Island: IRS Offers Tax Relief for Sandy Victims


Although the super storm has long past, the impacts of Hurricane Sandy linger. The vast majority of the 8.5 million power outages caused by Sandy have been resolved; however, there are still thousands of homes and businesses without power. While power has been restored to all customers in Rhode Island, parts of the Ocean State are still feeling the effects of the storm that first struck on October 26, 2012. As a result, the Internal Revenue Service has declared that Rhode Island hurricane victims are eligible for IRS disaster relief.

President Obama has declared federal disaster areas for Newport County and Washington County. As such, residents of those counties may qualify for tax relief in the form of filing and payment extensions and waived penalties, interest, and fees.

Who Qualifies

Affected taxpayers include:

  • "[I]ndividuals who live, and businesses whose principal place of business is located, in the covered disaster area."
  • "Taxpayers …whose … [relevant tax records] are in the covered disaster area."
  • "[R]elief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area."
  • "[A]ny individual visiting the covered disaster area who was killed or injured as a result of the disaster… ."

What Qualifies

Affected taxpayers have until February 1, 2013, to submit the tax returns and payments if they had an "original or extended due date occurring on or after Oct. 26 and on or before Feb. 1." These include, but are not limited to:

  • Individual tax returns;
  • Corporate tax returns;
  • Estate tax returns;
  • Partnership returns;
  • S corporation returns;
  • Trust returns;
  • Estate tax returns;
  • Gift tax returns;
  • Generation-skipping transfer tax returns;
  • Employment tax returns;
  • Certain other excise tax returns;
  • Estimated tax payments.
  • Other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), due on or after October 26, 2012, and on or before February 1, 2013.

Tax relief also applies to Form 5500 series returns, "pertaining to like-kind exchanges of property," although this also "applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above."

What Doesn't Qualify

  • These filing and payment extensions do not apply to:
  • Information returns in the W-2 series;
  • Information returns in the 1098 and 1099 series;
  • Forms 1042-S or 8027;
  • Employment and excise tax deposits.

Failure to timely file the above information forms may be cause penalties, but those penalties may be "waived under existing procedures for reasonable cause." The IRS will "abate penalties for failure to make timely employment and excise tax deposits due on or after Oct. 26 and on or before Nov. 26 " so long as the taxpayer makes necessary deposits by November 26.

Casualty Losses

"Affected taxpayers may claim disaster-related casualty losses on their federal income tax return for either this year or last year."

"Individuals may deduct personal property losses that are not covered by insurance or other reimbursements." Details are available at Form 4684 and its instructions.

For an expedited refund, affected taxpayers claiming disaster loss should put "Rhode Island/Hurricane Sandy" on the top of the form.

Other Relief

Taxpayers in need of copies of previously filed tax returns will be able to acquire them without the usual fees. When requesting the copy of a tax return from the IRS, taxpayers should include the assigned Disaster Designation in red ink at the top of Form 4506 or Form 4506-T.

The IRS will handle certain issues on a case-by-case basis. Affected taxpayers who have been contacted by the IRS on collection or examination matters should explain how the disaster has impacted them.

Additional information for Rhode Island residents is available at the IRS website. General information is available at 800-829-1040.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.