Disaster Related Extension of Deadlines Act
Disaster Related Extension of Deadlines Act
Plain Language Summary
# Summary of the Disaster Related Extension of Deadlines Act **What the bill does:** This bill would change how the IRS handles tax deadlines when a federal disaster occurs. Currently, when the government postpones tax filing deadlines due to a disaster (like a hurricane or tornado), that postponement doesn't officially "count" as an extension for certain tax purposes. This bill would treat disaster-related deadline postponements the same way as regular tax extensions, which could allow people to claim refunds for taxes paid during a longer time period. **Who it affects and key details:** The bill primarily affects taxpayers in disaster areas who are filing refund claims. Under current rules, refund claims must be filed within three years, and the IRS only looks back at taxes paid during that three-year period (plus any official extensions).
This can cause problems after disasters—if the government delays tax deadlines by several months, some taxes people paid might fall outside the three-year window and wouldn't count toward their refund. The bill would fix this by allowing the disaster-related delay to extend that window, ensuring people don't lose refunds simply because of timing caused by the disaster. **Current status:** The bill is currently in committee (S. 1438, sponsored by Senator Raphael Warnock of Georgia) and has not yet been voted on by the full Senate.
CRS Official Summary
Disaster Related Extension of Deadlines ActThis bill requires the Internal Revenue Service (IRS) to treat the postponement of the federal tax return deadline due to a federally declared disaster or certain other events as an extension of such deadline for purposes of calculating the limit on a tax refund. The bill also provides that the IRS’s deadline for sending certain notices includes such postponement.Under current law, a tax refund claim must be filed within three years of the date that the federal tax return is filed. (Some exceptions apply.) The tax refund amount generally is limited to federal taxes paid within the three years preceding the tax refund claim plus any extension of the federal tax return deadline (lookback period). The postponement of the federal tax return deadline is not an extension for purposes of the lookback period. (Thus, certain tax payments made before the federal tax return is filed may be excluded from the lookback period.)Under the bill, a federal tax return deadline postponed due to a federally declared disaster or certain other events must be treated as an extension of such deadline for purposes of the lookback period.Under current law, the IRS is required to mail a notice and demand for tax payment within 60 days of an assessment but not before the tax payment due date. The bill provides that the tax payment due date includes the postponement of the tax payment deadline due to a federally declared disaster or certain other events.
Latest Action
Read twice and referred to the Committee on Finance.