In a letter to House leadership for the Committee on Ways & Means, the American Institute of CPAs (AICPA) expressed its strong support for H.R. 517, the Filing Relief for Natural Disasters Act (FRNDA), sponsored by Representatives David Kustoff (R-TN) and Judy Chu (D-CA), and H.R. 1491, the Disaster Related Extension of Deadlines Act (DREDA), sponsored by Representatives Gregory Murphy (R-NC) and Jimmy Panetta (D-CA). These bills would provide efficient and fair tax relief to individuals and businesses affected by natural disasters.
Currently, the process of receiving tax relief from the IRS during a disaster is triggered by a federal disaster declaration, which can come days or weeks after a state disaster declaration. The Filing Relief for Natural Disasters Act would expedite the issuance of federal tax relief and provide the IRS with authority to grant tax relief once the governor of a state declares a disaster or state of emergency.
Oftentimes, taxpayers impacted by disasters also have less time to make a refund or credit claim than those who are not affected. This is due to the fact that filing and payment deadline extensions do not extend the cutoff for refund or credit claims, which remain based on the original filing deadline. The Disaster Related Extension of Deadlines Act would solve this problem by extending the time for filing a claim for credit or refund (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters.
For many years, the AICPA has advocated for the provisions outlined in FRNDA and DREDA through various comment letters, position papers and the 2025 AICPA Compendium of Tax Legislative Proposals, which includes 14 disaster tax relief recommendations. These bills have also been included in the Taxpayer Assistance and Service (TAS) Act discussion draft, which has been endorsed by the AICPA.
“These bills address two very important issues for the AICPA and we are pleased to offer our strong support,” said Daniel Hauffe, Senior Manager for Tax Policy & Advocacy with the AICPA. “Tax practitioners and their clients who are impacted by disasters should be afforded every opportunity to meet their tax obligations without the additional stress and anxiety caused by an unavoidable situation. These bills provide those opportunities and we are grateful to Representatives Kustoff, Chu, Murphy and Panetta for their leadership on this issue.”
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Tags: disaster relief, hurricane relief, Income Taxes, IRS, tax relief, Taxes
Julia February 26 2025 at 3:57 pm
Nice