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FEDERAL TAX RELIEF FOR VICTIMS OF TROPICAL STORM IRENE IN VERMONT

August 17, 2012
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The IRS has announced that taxpayers in many Vermont counties will be entitled to extensions from August 29 to October 31, and an election for treatment of uninsured casualty losses.

The federal tax relief covers all taxpayers who reside or have a principal place of business in areas under an individual disaster declaration – that includes all counties of Vermont except Essex, Franklin, Grand Isle, Lamoille, and Orleans.  The relief described below applies automatically, and taxpayers need not contact the IRS at this time.

Additionally, the relief extends to other taxpayers whose necessary records are in the affected counties, and to relief workers affiliated with a recognized government or philanthropic organization assisting with relief in the covered areas.  These taxpayers must call the IRS at (203) 415-1015 to identify themselves to the IRS and apply for tax relief.

Tax Returns
Affected taxpayers will have until October 31 to file and pay on most federal tax returns that had an original or extended due date falling between August 29 and October 31.  This includes most individual, corporate, trust and estate income tax returns and payments.  Withholding deposits due starting August 29 will not be subject to penalties provided they are made by September 13.  Beyond that, hardship waivers are available on a case by case basis. You may apply for the withholding hardship waiver by calling the IRS at 1-(866) 562-5227.

Casualty Losses
Affected taxpayers will have the option to claim uninsured personal property casualty losses on their federal income tax return for 2010 or 2011.  If the loss is claimed on an amended return for last year, the taxpayer should put “Vermont/Hurricane Irene” on the top of the form and the IRS will expedite any refund in 6-8 weeks.  Please note that some taxpayers would realize greater tax relief by waiting to claim the loss on the 2011 return.

For more information and full details go to the IRS Website.  This document summarizes the IRS relief, and explains the parallel and additional relief that is offered by the state.