Post-Hurricane Irma Message for Clients
Posted on September 12, 2017 by Joseph Saka
Dear Clients and Friends.
It is our sincerest hope that you weathered Hurricane Irma safely and with minimal or no damage to property.
Our ability to communicate with our clients and co-workers continues to be difficult. We are currently assessing the extent to which our offices are accessible and operational at all four of our South Florida locations. Many of our firm members evacuated to other locations, some out of state, and now need to travel back to their homes. Others who remained in, or near, our communities are still without utilities and are unsure of their ability to find the gasoline needed to drive to our offices.
For our tax clients with pending tax returns, we continue to monitor communications posted by the IRS regarding extensions of time to file business returns which are currently due September 15, 2017.
As we assess our circumstances, it is apparent that we will not be able to meet the September 15th deadline for many of our clients. Typically the IRS grants extensions of time to file for taxpayers whose homes, businesses and business records reside or are maintained in locations that have been declared Major Disaster Areas. The IRS typically bootstraps the granting of these administrative extensions to areas designated by FEMA for “Individual Assistance.” To date FEMA has not specifically identified any counties for Individual Assistance as it appears that their priority is to work with municipalities to secure local infrastructure. Consequently, we may not know if the administrative extension has been granted until after the deadline.
In the absence of an automatic extension, taxpayers can still have any penalties for late filing and payment abated by establishing reasonable cause. We are confident that the IRS will take positions favorable for Florida filers.
For our calendar year clients holding estimated tax payment vouchers, the granting of these administrative extensions would also allow you to defer your third-quarter 2017 estimated tax payment that is otherwise due this Friday, September 15th.
We recommend that you hold off sending the payment if you have not already done so until Thursday, September 14, 2017. If the IRS announces an administrative extension, we will let you know and you could choose to hold your payment until the extended due date and use the funds for now to assist with hurricane costs.
The declaration of a disaster area may provide other tax advantages that, in combination with a late filed or amended return, may allow you to recognize 2017 losses on your 2016 return. Once you have had a chance to assess and measure any hurricane-related losses that will not be covered by insurance you may choose to ultimately file or amend your 2016 return to take these losses in 2016 which could provide a refund or reduction of your 2016 taxes. Assuming the IRS grants an extension as we expect, we will be assessing such opportunities as we prepare your returns for your review.
Finally, please keep in mind that we are available to help consult with you regarding other matters pertaining to hurricane damages, such as IT recovery consulting or business interruption losses.
Please contact us if you need assistance in these or other areas. We want you to know that we are here to help you and although we may be temporarily out of touch, your tax and business needs are still our priority.