WASHINGTON – Sen. Chuck Grassley today convinced the Treasury Secretary to give a break to Iowa farmers who are unable to file their taxes by the March 1 deadline due to winter storm damage.
Grassley made the case to Secretary Hank Paulson during a breakfast meeting. This afternoon the Internal Revenue Service issued special instructions that all farmers hit by the storm who are unable to file their taxes by the deadline can request a winter ice storm waiver from the IRS for the penalty that they would otherwise incur.
At the morning meeting Grassley brought up the predicament Iowa farmers are in because of the winter storm. At the time, Paulson was not aware of the problem and indicated to Grassley that he would look into it and do what he could to help.
“The Secretary stood by his word that he would do what he could to help. Thanks to his quick action, farmers can worry about what’s most important – taking care of their livestock and family,” Grassley said.
A special rule allows many farmers to routinelydelay their estimated tax payments without penalty so long as they file their return with their tax payment by March 1st of each year. The power outages led many Iowa accountants to call Grassley’s office to explain that farmers this year would be unable to complete their returns by March 1st because their computers were down and they could not print their files. The cancellations will also lead to a backlog when the power does eventually come on.
To request a waiver of the estimated tax penalty in accordance with today’s decision, farmers should complete Form 2210-F Underpayment of Estimated Tax by Farmers and Fishermen. People should also attach a statement explaining the reasons they are unable to meet the estimated tax requirements. At the top of the request write “Request for Waiver Due to Winter Ice Storms.”
Grassley has also written President George W. Bush to express his appreciation for the action made by the IRS this afternoon as well as outline the circumstances in Iowa due to the storms. The letter urges the President to respond quickly if the Governor of Iowa makes a request for broad-based federal disaster assistance. This would make available a range of emergency relief services in Iowa and give the IRS the authority to give tax filing flexibility to all farmers in a disaster county.
The text of the IRS notice issued today and Grassley’s letter to Bush follows here.
The Honorable George W. Bush
President of the United States of America
The White House
1600 Pennsylvania Avenue, NW
Washington
, DC 20500
Dear Mr. President:
As you may be aware, a massive snow and ice storm hit Iowa and other states over this past weekend. The current conditions in Iowa are dire and predictions from the weather service are that another equal size storm will roll into the state today.
The farmers of Iowa are currently facing a March 1 deadline to file their returns without incurring an estimated tax penalty under section 6654(i). However, penalty relief may be provided under section 6654(e)(3) with respect to any underpayment to the extent the Secretary determines that by reason of casualty, disaster, or other unusual circumstances the imposition of such addition to tax would be against equity and good conscience. This morning at my meeting with the Treasury Secretary, I spoke with Secretary Paulson about this urgent matter and I expressed to him that this exception is warranted under the current conditions. I asked him to take immediate steps to assure farmers in Iowa and other states that such relief will be granted. The Internal Revenue Service has just issued a news release informing farmers and fishermen affected by the storms of the filing procedures to follow in order to seek penalty relief. In addition to this, I am seeking your help to expedite a request that is expected to be made by Governor Chet Culver to declare much of Iowa a Presidentially declared disaster area.
As I write you, I understand that Governor Chet Culver is preparing the request and has already declared 60 Iowa counties disaster areas. He has told citizens who remain without power to relocate to one of their areas emergency storm shelters. The Federal Emergency Management Agency has been working with the Iowa Association of Electric Cooperatives on a preliminary damage assessment. More than 200 Iowa National Guard members were activated to distribute power generators to help areas pump water and handle sewage treatment. According to officials, the National Guard also has 28 of its armories on stand-by to serve as emergency shelters. 47 emergency shelters are currently open in the state.
According to the latest statistics provided to me by the utility companies, at the peak of the storm the rural electric cooperatives estimated 100,000-120,000 members were without power and the investor-owned utilities estimated around 200,000 members were without power at the peak of the storm. The utility companies also estimated that approximately 122,000 customers are still without power with many customers expected to be without electricity service for at least three more days and some may be without power for a week or more.
In addition, the Department of Agriculture has agreed to work with Governor Chet Culver and emergency management officials to assist livestock producers in counties most-affected by the weekend winter storm. Livestock producers reported a critical need for generators to power environmental controls and supply water for livestock in the affected counties. Some producers are reporting large-scale livestock death and similar emergency situations.
I believe that the conditions outlined above reflect the conditions envisioned by the statute in providing for an exception to the imposition of the estimated tax penalties. I expect that Secretary Paulson will take appropriate actions and ensure that all necessary steps are taken to make certain that the farmers of Iowa and other similarly effected States are properly alerted to such relief. However, I also would request that you do everything you can to expeditiously approve Governor Chet Culver’s request for a declaration of a Presidentially declared disaster area.
Sincerely,
Charles Grassley
Ranking Member
cc: The Honorable Henry M. Paulson, Jr., Secretary of the Treasury
The Honorable Mark W. Everson, Commissioner, Internal Revenue Service
Kevin Brown, Commissioner, Small Business/Self-Employed Division, Internal
Revenue Service
Farmers, Fishermen Affected by Storms Can Seek Penalty Relief
IR-2007-45, Feb. 28, 2007
WASHINGTON
— The Internal Revenue Service announced today that farmers and fishermen may ask the IRS to waive any estimated tax penalties if they were affected by the snowstorms that began on February 19, 2007.
The timing and suddenness of the storm, as well as the resulting power outages, may have affected the ability of many farmers and fishermen to file their 2006 calendar year return by March 1, 2007.
Generally, farmers and fisherman can avoid an estimated tax penalty if they file their returns and pay the full amount of tax shown on their return by March 1, 2007. An individual is a
farmer or fisherman for these purposes if two-thirds of the individual’s total gross income for the taxable year or the preceding taxable year is from farming or fishing (including oyster farming).
If a taxpayer has an underpayment of estimated tax, all or part of the penalty for the underpayment may be waived if the IRS determines that the underpayment was due to a casualty, disaster or other unusual circumstance and it would be inequitable to impose the penalty.
To request a waiver of the estimated tax penalty, affected taxpayers should complete Form 2210-F Underpayment of Estimated Tax by Farmers and Fishermanand file it with their Form 1040 series income tax return. As indicated in the instructions to Form 2210-F, a statement should be attached to the Form explaining the reasons why you are unable to meet the March 1 deadline. At the top of the Form 2210-F, write “Request for Waiver Due to Winter Ice Storms.”
Taxpayers may download forms and publications from IRS.gov or may order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.
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