I never thought I'd be saying many good things about the IRS, but they have come through with some good ideas related to Hurricane relief:
The IRS has added to the relief previously granted to victims of Hurricane Katrina in IR-2005-84. Hurricane Katrina victims will now have until January 3, 2006, to file any returns, pay any taxes or make any deposits due. Deadlines will run through the end of calendar year 2005, which would be to January 3, 2006, after taking account of the New Year holiday, said Everson. The extension applies to any return, tax payment or tax deposit with an original or extended due date on or after August 29, 2005, and is available in all counties and parishes listed in IR-2005-91.
The IRS also announced that it will abate interest and any penalties for late filing, late payment or failure to make deposits that would otherwise apply. The relief covers the September 15 due date for estimated taxes and calendar-year corporate returns with extensions, the October 17 deadline for individuals who received a second extension of time to file an individual income tax return and the October 31 deadline for filing quarterly federal employment and excise tax returns.
That boils down to a 3 1/2 month extension for a lot of things. Here's another good idea:
To further help hurricane relief efforts, Everson and Snow announced that employees can donate vacation, sick or personal leave so employers can make cash payments to qualified tax-exempt organizations that help hurricane victims. The employees do not have to include donated leave in their income, and employers will be permitted to deduct the cash contribution. Employer cash donations must be made before January 1, 2007.
Employees participating in a leave-donation program may not claim a charitable contribution deduction with respect to the value of foregone leave excluded from wages. However, employers will be permitted to deduct cash payments made under such programs as a business expense under Code Sec. 162 if the payment is: (1) made to a charitable organization for the relief of Hurricane Katrina victims; and (2) paid before January 1, 2007.
I don't know if this leave donation thing will catch on, but it's a good idea.
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