Sens. Thom Tillis, R-NC; and Raphael Warnock, D-GA, recently introduced bipartisan legislation, the Disaster Related Extension of Deadlines Act, to extend tax relief to taxpayers recently impacted by natural disasters.
“Helene devastated communities across Western North Carolina, leaving many families struggling to recover,” said Tillis in a press release. “North Carolinians affected by this disaster deserve the opportunity to claim the tax refunds they’re entitled to without facing unnecessary red tape. This commonsense legislation ensures disaster victims aren’t penalized for circumstances beyond their control and provides much-needed relief during the recovery process.”
There is typically a three-year window for taxpayers to claim a credit or refund for overpaid taxes. When a filing deadline is extended due to a federally declared disaster or similar event, it does not extend the three-year “lookback period” for refunds. This could result in taxpayers relying on extended deadlines and missing the window to claim a refund.
Additionally, even if the payment deadline is delayed, the IRS is legally required to issue a demand for payment within 60 days of a tax assessment. This can lead to confusing and premature collection notices being sent to disaster-affected taxpayers, adding to their stress during an already difficult time.
The bill proposes key changes to ensure that taxpayers affected by disasters receive the same treatment as all other taxpayers when claiming their refunds. It would extend the standard three-year period for obtaining a refund or credit when the IRS has provided a filing deadline extension due to a natural disaster. This change would ensure that such deadline extensions do not inadvertently shorten the timeframe disaster-impacted taxpayers have to claim refunds. Additionally, the act would align the automatic IRS payment deadline with any disaster-related filing deadline extensions. The legislation has received support from the American Institute of CPAs and the National Association of Realtors.
This follows a letter recently sent by the North Carolina congressional delegation, led by US Rep. Tim Moore, R-NC14, to Melanie Krause, acting commissioner of the IRS, requesting that the already extended deadline for Hurricane Helene victims be extended from May 1 to Sept. 25.