Waldorf, MD -- People and businesses damaged by the April 28 tornado may be eligible for immediate tax refunds, if the taxpayer files an amended return for 2001.
The U. S. Internal Revenue Service (IRS) 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.
Lessen the Burden
"Granting disaster tax relief can help lessen some of the burden that many Marylanders are now facing as a result of the April 28 tornado," said Sam Serio, an IRS spokesperson for Maryland. "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."
The IRS will prepare the tax forms at no charge. Affected taxpayers in Charles, Calvert and Dorchester Counties have a choice of claiming the uninsured casualty loss sustained in 2002 on their 2002 tax return they file next year, or filing a Form 1040X now to amend their 2001 tax returns.
"Taxpayers located in the designated disaster areas are granted an extension of time to file returns and to pay tax until June 3, 2002, for federal tax returns originally due on or after April 28, 2002, and before June 3, 2002," Serio said.
This automatic extension does not apply to the Form 5500 series returns, or employment
and excise tax deposits. However, penalties on these tax deposits may be abated during this period due to reasonable cause.
Other tax provisions provided as a result of this May 1 declaration include:
IRS will abate interest on any tax payments made by the extended due date of June 3.
IRS will waive user fees for requests of photocopies of tax returns and will expedite all requests from taxpayers in the impacted areas.
IRS will delay most collection and examination notices going to taxpayers in the designated areas until June 3.
Affected taxpayers, whether individuals or businesses, in a Presidentially declared disaster area have the option of claiming any casualty losses on the tax return for the year of the disaster (2002) or the previous year (2001), whichever provides the greater tax benefit to the taxpayers. Taxpayers must reduce the amount of their loss by insurance or other reimbursements received or expected.
Affected taxpayers should put "Southern Maryland Tornado Disaster" across the top margin in red of any return or correspondence relying on this relief. IRS Form 4684, Casualties and Thefts, is used to claim these casualty losses and is attached to the Form 1040 or Form 1040X, if an amended return is being filed for a previous year. IRS telephone assistance is available by calling 1-800-829-1040, 24 hours a day, seven days a week. Mention "Southern Maryland Tornado Disaster when speaking to the IRS representative.
State Income Tax
Items of income and deductions reported on the federal return of Maryland taxpayers are carried to their Maryland tax return. "Reported casualty losses resulting from the April 28 tornado will carry from their federal return to their Maryland return to reduce Maryland taxable income," said Jim Arnie, director of the Maryland Revenue Administration Division. "Taxpayers qualifying to amend their 2001federal return will want to amend their 2001 Maryland return to apply for a refund."
Working with the supervisors of assessments in the declared counties, the State Department of Assessm...