The Internal Revenue Service (IRS) has issued a notice to taxpayers in parts of four disaster-stricken states that they must file their federal income tax returns and pay any taxes owed by the end of the month or face consequences.
This year, most taxpayers were required to file by April 18, which was also the deadline for paying any taxes owed to the IRS.
However, the agency granted special relief to taxpayers affected by federally declared disasters in various regions in the form of filing and payment due date extensions.
The extended deadlines varied by region. Some disaster-area taxpayers—including in most of California, as well as parts of Alabama and Georgia—were granted an extension until Oct. 16 to file their tax returns and make tax payments. For others, that deadline falls sooner.
In a reminder issued earlier this week, the IRS said that taxpayers in storm-impacted parts of Arkansas, Indiana, Mississippi, and Tennessee, have until July 31 to file their tax returns and pay any amounts due.
“As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time without having to ask for it,” the agency said in a statement.
The July 31 deadline applies to taxpayers affected by four different disaster declarations resulting from severe storms, tornadoes, and straight-line winds during late March and early April of this year.
The following affected areas are included in the latest IRS reminder:
Three counties in Arkansas: Cross, Lonoke, and Pulaski counties, were impacted by storms and tornadoes on March 31.
Thirteen counties in Indiana: Allen, Benton, Brown, Clinton, Grant, Howard, Johnson, Lake, Monroe, Morgan, Owen, Sullivan, and White counties, affected by storms, straight-line winds, and tornadoes from March 31 to April 1.
Seven counties in Mississippi: Carroll, Humphreys, Monroe, Montgomery, Panola, Sharkey, and Washington counties, were hit by severe storms, straight-line winds, and tornadoes from March 24 to 25.
Thirteen counties in Tennessee: Cannon, Giles, Hardeman, Hardin, Haywood, Johnson, Lewis, Macon, McNairy, Morgan, Rutherford, Tipton, and Wayne counties, were impacted by severe storms, straight-line winds, and tornadoes from March 31 to April 1.
Taxpayers who fall into the above categories and need an extension beyond July 31 can apply for extensions, but they must be submitted in paper format using Form 4868, the IRS said.
The reason is that electronic filing options are not available for extension requests that fall after the original April 18 filing deadline.
Taxpayers who owe the IRS money but miss their respective deadlines to file a tax return face a failure to file a penalty amounting to 5 percent of the unpaid tax due for each month that they’re late with the payment.
This is also the case for unpaid amounts owed beyond a given deadline, in which case the IRS charges a failure to pay penalty of 0.5 percent of the tax owed per month.
If both a failure to file and a failure to pay penalty are charged for a given month, then the failure to file penalty is reduced by the amount of the failure to pay penalty. This means that the combined penalty for a given month will never exceed 5 percent for each month or part of a month that the return was late.
The penalties jointly max out at 25 percent of the unpaid tax owed.
Special Notice
The latest reminder follows a recent special mailing the IRS sent to taxpayers in disaster-affected areas as a follow-up clarification after an earlier message wrongly told them they had 21 days to pay taxes owed.
“Although the initial notice indicated a payment deadline of 21 days, taxpayers in these disaster-declared regions actually have until a later date this year to make their payments within the designated timeframe,” the IRS said in a June 28 statement.
In late May and June, taxpayers with balances due who live in parts of Alabama, Arkansas, California, Florida, Georgia, Indiana, Mississippi, and Tennessee that fell under disaster declarations received a CP14 notice from the IRS.
Many of the CP14 notices incorrectly said the affected taxpayers had three weeks to pay outstanding balances.
“We know our initial mailing caused confusion for taxpayers and tax professionals, and we worked quickly to send a follow-up reminder to help reassure people,” IRS Commissioner Danny Werfel said in a statement.
“This mailing reflects how we’re trying to be more taxpayer-focused given the additional resources that we’ve been given under the Inflation Reduction Act.”
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