The Gulf of Mexico oil rupture has already seen a far reaching impact, from commercial and environmental issues to politics and viral blog sites.
Now the IRS is getting involved in the fray.
The IRS has recently established guidelines for those who may be affected by the spill. These procedures are expected to remain in place for some time, with additional direction and assistance forthcoming as the world grapples with this environmental disaster.
Because of the spill, taxpayers may be experiencing hardships in either the filing of their personal or business tax returns or facing a difficulty in the payment of their current tax obligations. For those impacted by the spill, the IRS has established a toll free special hotline number of 1-866-562-5277. The line is currently being staffed from 7am to 10pm local time.
For those who may have already been established on a repayment plan for past due tax debt, their ability to make monthly payments may have been slowed if their means to earn a living was interrupted by the spill.
If qualified, taxpayers who call this number may request a stay on collection activity for up to six months. Examinations, the issuance of notices, collections, levies, liens and other enforcement actions will be held in abeyance. Taxpayers can self-identify themselves as being negatively impacted; no additional proof or documentation of the hardship will be required.
Any delinquent tax debt will still accrue interest and any applicable penalties during this stay of collection activity. For this reason, the IRS still encourages taxpayers to make arrangements for repayment, even if the amount they can pay is minimal. The IRS has various options for establishing payment plans, and may accept a monthly amount that will not fully pay the balance over the remaining amount of time left to collect under the statute.
Any offset of federal or state refunds to past tax debt may still occur even if one qualifies for relief.
According to an IRS Press Release on June 25th, Commissioner Doug Shulman said, “This is a very difficult time for many people affected by the oil spill in the Gulf of Mexico. As residents of the region cope with the evolving situation, I want to assure them that the IRS will be doing everything it can to provide tax help to those who need it. We encourage anyone who has an issue with the IRS to contact us and explain their hardship, and we will work with them to find a solution. We’ll do everything we can under current law to help taxpayers.”
Additionally, the IRS has reminded those who may be recipients of monetary damages from BP that settlements to cover lost wages or other income are generally taxable, where payments made to cover property damages or physical injuries are generally not subject to tax.
For additional information, please see the following links on IRS.gov and IRS Press Releases:
Gulf Oil Spill Information Center