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Disaster Victims in Mississippi, Tennessee and Other Southern States Qualify for Tax Relief

The Internal Revenue Service has announced on its Web site that victims of severe storms, tornadoes, straight-line winds and associated flooding beginning on April 25, 2011, in counties in Tennessee; beginning on April 15, 2011, in counties in Mississippi; and on April 27, 2011, in counties in Georgia that are designated as federal disaster areas qualifying for individual assistance have more time to make tax payments, file returns, and perform certain other time-sensitive acts. Similar relief was provided to more victims of severe storms, tornadoes, straight-line winds, and flooding beginning on April 15, 2011, in Alabama.

Who is eligible for relief: Taxpayers considered to be affected taxpayers, described below, are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts.

Any individual whose principal residence, and any business entity whose principal place of business, is located in the counties designated as disaster areas; who is a relief worker assisting in a covered disaster area, regardless of whether he is affiliated with recognized government or philanthropic organizations; whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area; any estate or trust that has tax records necessary to meet a filing or payment deadline in a covered disaster area; and any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife.

What may be postponed:  The IRS gives affected taxpayers until the extended date (specified by county, see below) to file most tax returns (including individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date falling on or after the onset date of the disaster (specified by county, see below), and on or before the extended date.

The postponement does not apply to employment and excise tax deposits. However, the IRS will abate penalties for failure to make timely employment and excise deposits, due on or after the onset date of the disaster, and on or before the deposit delayed date provided the taxpayer made these deposits by the deposit delayed date.

Taxpayers who qualify for assistance were granted an extension to June 30, 2011, to file most tax returns, pay taxes, including estimated taxes and perform other time-sensitive acts otherwise due on or after April 14 and on or before June 30.  This includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an individual retirement account (IRA).

Taxpayers who suffer a casualty loss as a result of a federally declared disaster have the option of claiming disaster-related casualty losses on their federal income tax returns for either 2010 or 2011.

Affected areas and dates for storms, floods and other disasters in 2011 that are federal disaster areas qualifying for individual assistance, as published on IRS's website, are listed below.

Mississippi
The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds, and associated flooding beginning on April 15, 2011: Chickasaw, Choctaw, Clarke, Greene, Hinds, Jasper, Kemper, Lafayette, Monroe, Neshoba and Webster counties. 

Tennessee
The following are the federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds and associated flooding beginning on April 25, 2011: Bradley, Greene, Hamilton and Washington counties.

In addition to Mississippi and Tennessee, relief is available for certain counties in Alabama, Georgia, North Carolina and Oklahoma.

HORNE's tax team is ready to assist you.  For more information, please contact your HORNE advisor.