Tax Refund A Possibility for Flood Survivors

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Release date: 
October 26, 1999
Release Number: 
1297-43

NEW CASTLE, Del. -- People and businesses damaged by Hurricane Floyd may be eligible for tax refunds.

The refunds may even be available this year, if the taxpayer files an amended return for 1998.

The Internal Revenue Service offers a variety of assistance to disaster survivors and may allow casualty losses that were suffered on real property, home personal property and household goods to be deducted on the income tax return if they are not covered by insurance.

The IRS will prepare the tax forms at no charge, and taxpayers may also file an amended return to receive an early tax return.

Lessen the Burden

"Granting disaster tax relief can help lessen some of the burden that many Delawareans are now facing as a result of Hurricane Floyd," said Marie Medeck, IRS acting district director for the Delaware-Maryland District. "While I certainly recognize that during times of hardship like this, taxes are not a top priority for those in crisis, it is, however, important for these people to know that relief is available to them. Tax relief includes assistance from IRS employees in calculating casualty losses, completing tax returns and assisting them in applying for immediate refunds to help offset their hardship."

Affected taxpayers in New Castle County have a choice of claiming the uninsured casualty loss sustained in 1999 on their 1999 tax return they file next year, or filing a Form 1040X now to amend their 1998 tax returns.

Waive Penalties

The IRS will also waive penalties on deposits required to be made by affected New Castle County taxpayers on or after Sept. 14, if the deposits are made by Jan. 31, 2000. The IRS is waiving interest and penalties as allowed by law, but the tax law provides for interest abatements only for income taxes when the IRS extends a filing deadline in a disaster area. For example, affected taxpayers in New Castle County will not face late filing or late payment penalties for quarterly employment or excise tax returns due Nov. 1, 1999, if they meet the Jan. 31, 2000 deadline. But they will owe interest on any balances not paid by Nov. 1. The same rule applies to any estate or gift tax returns originally due during the relief period.

Suspend Many Enforcement Activities

The IRS will also suspend many enforcement activities - such as audits, levies, summonses and seizures - for taxpayers in New Castle County until Jan. 31, 2000.

Affected taxpayers should put "HURRICANE FLOYD" at the top of any return or correspondence relying on this relief. IRS telephone assistance is available by calling 1-800-829-1040, 24 hours a day, seven days a week. Mention "Hurricane Floyd Tax Relief" when speaking to the IRS representative.

State Income Tax

Items of income and deductions reported on the federal return of Delaware taxpayers are carried to their Delaware tax return. "Reported casualty losses resulting from Hurricane Floyd will carry from their federal return to their Delaware return to reduce Delaware taxable income," said William Remington, director of the Delaware Division of Revenue. "Taxpayers qualifying to amend their 1998 federal return will want to amend their 1998 Delaware return to apply for a refund."

New Castle County Taxes

The only New Castle County tax relief for survivors of Hurricane Floyd will be for substantial damage to real property. In this case an assessment appeal should be filed through the Department of Land Use, 87 Read's Way, New Castle, DE 19720. Taypayers may call 302-395-5540 for additional information regarding the annual appeal process.

Individual assistance programs were made available through the disaster declaration issued by President Clinton on Sept. 21 at the request of Governor Thomas R. Carper...

Last Updated: 
July 16, 2012 - 18:46
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