THE IRS ISSUES DISASTER RELIEF FOR HURRICANE FIONA, HURRICANE IAN, NEW YORK SNOWSTORMS, AND OTHER RECENT DISASTERS

January 30, 2023

In the last few months of 2022, entering 2023, we have seen an increase in hurricanes, snowstorms, flooding, and other extreme weather events. The IRS has recently published federally declared tax relief on their website for several disasters.  It is important for taxpayers who are utilizing a 1031 exchange (“Exchangers”) to understand the effects of federally declared disasters on the strict deadlines for completing an exchange.[1] As of the date of this newsletter, the below relief notices are relevant and may apply to extend the 45-day and 180-day deadlines for ongoing IRC Section 1031 exchanges. Exchangers may also be eligible for additional relief under Rev. Proc. 2018-58, Section 17 (“extended relief”), as an alternative to the general postponements mentioned below.

Please take advantage of the clickable links which will direct you to the IRS website’s tax relief notice for each federally declared disaster. All forms of disaster relief are issued and qualified by the Internal Revenue Service and not by your Qualified Intermediary. As stated on the IRS website here, taxpayers qualifying for relief who live outside the disaster area should contact the IRS at 866-562-5227.

Most recently, the IRS has issued tax relief as follows:

Alabama: Tax relief to those who reside, or who have businesses located in Autauga, Coosa, Dallas, Elmore, Greene, Hale, Sumter and Tallapoosa counties. IRS Notice AL-2023-01, dated January 19, 2023 (updated January 20 and 27, 2023).

On or after date:         January 12, 2023
General extension:      May 15, 2023

For information regarding additional extended relief and relief pursuant to AL-2023-01, click here.

Georgia: Tax relief to those who reside, or who have businesses located in Butts, Henry, Jasper, Meriwether, Newton, Spalding, and Troup counties. IRS Notice GA-2023-01, dated January 19, 2023.

On or after date:         January 12, 2023
General extension:      May 15, 2023

For information regarding additional extended relief and relief pursuant to GA-2023-01, click here.

California: Tax relief to those who reside, or who have businesses located in Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo, and Yuba counties, California. IRS Notice CA-2023-01, dated January 10, 2023 (updated January 11, 2023).

On or after date:         January 8, 2023
General extension:      May 15, 2023

For information regarding additional extended relief and relief pursuant to CA-2023-01, click here.

New York (2): Tax relief to those who reside, or who have businesses located in Erie and Genesee counties, New York. IRS Notice NY-2022-09, dated December 29, 2022.

On or after date:         December 23, 2022
General extension:      April 18, 2023

For information regarding additional extended relief and relief pursuant to NY-2022-09, click here.

New York (1): Tax relief to those who reside, or who have businesses located in Cattaraugus, Chautauqua, Erie, Genesee, Jefferson, Lewis, Niagara, Oneida, Oswego, St. Lawrence, and Wyoming counties, New York. IRS Notice NY-2022-08, dated December 2, 2022.

On or after date:         November 18, 2022
General extension:      March 15, 2023

For information regarding additional extended relief and relief pursuant to NY-2022-08, click here.

Florida (Hurricane Nicole): Tax relief to those who reside, or who have businesses located in Alachua, Baker, Bradford, Brevard, Broward, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough, Holmes, Indian River, Jackson, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Martin, Miami-Dade, Nassau, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, St. Lucie, Sumter, Suwannee, Taylor, Union, Volusia, Wakulla, and Washington Counties; the Miccosukee Tribe of Indians of Florida and the Seminole Tribe of Florida. IRS Notice FL-2022-20, dated December 16, 2022 (updated December 23, 2022).

On or after date:         November 7, 2022
General extension:      March 15, 2023

For information regarding additional extended relief and relief pursuant to FL-2022-20, click here.

North Carolina (Hurricane Ian): Tax relief to those who reside, or who have businesses located throughout the entire state of North Carolina. IRS Notice NC-2022-10, dated October 5, 2022.

On or after date:         September 28, 2022
General extension:      February 15, 2023

For information regarding additional extended relief and relief pursuant to NC-2022-10, click here.

South Carolina (Hurricane Ian): Tax relief to those who reside, or who have businesses located throughout the entire state of South Carolina. IRS Notice SC-2022-06, dated October 5, 2022.

On or after date:         September 25, 2022
General extension:      February 15, 2023

For information regarding additional extended relief and relief pursuant to SC-2022-06, click here.

Florida (Hurricane Ian): Tax relief to those who reside, or who have businesses located throughout the entire state of Florida. IRS Notice FL-2022-19, dated September 29, 2022 (updated October 5, 2022).

On or after date:         September 23, 2022
General extension:      February 15, 2023

For information regarding additional extended relief and relief pursuant to FL-2022-19, click here.

Puerto Rico (Hurricane Fiona): Tax relief to those who reside or have businesses in any of the 78 municipalities of Puerto Rico. IRS Notice PR-2022-10, dated September 19, 2022.

On or after date:         September 17, 2022
General extension:     February 15, 2023

For information regarding additional extended relief and relief pursuant to PR-2022-10, click here.

Illinois: Tax relief to those who reside, or who have businesses located in St. Clair County, Illinois. IRS Notice IL-2022-08, dated November 16, 2022.

On or after date:         July 25, 2022
General extension:      February 15, 2023

For information regarding additional extended relief and relief pursuant to IL-2022-08, click here.

*Please note that extended relief may be available in addition to the General relief. For information about this extended relief, please see the comprehensive articles linked above.

The Notices extend the deadlines to file various individual and business tax returns/ deadlines and make tax payments for affected taxpayers, including those in Rev. Proc. 2018-58, which covers the deadlines applicable to Section 1031 like-kind exchanges (“General Relief”). Section 17 of Rev. Proc. 2018-58 provides for an additional option for extended relief available to “affected taxpayers” and “impacted exchangers.” This means that Exchangers can potentially extend either their 45-day identification period, their 180-day exchange period, or both under Section 17 of the Revenue Procedure. Taxpayers are also advised to research state-level disaster relief.

Eligibility for disaster extensions could vary on a case-by-case basis and the Covered Disaster Areas specified in IRS guidance are often updated over time.  Exchangers and their advisors should carefully review any IRS guidance regarding disaster relief and make any determinations accordingly. When considering the impact of these disasters, it is important to determine if you or one of your clients is an affected taxpayer or otherwise eligible for tax relief, even if located far from the disaster area. If so, you should promptly contact your Section 1031 qualified intermediary.

[1] “Federally declared disasters” = “Presidentially declared disasters.”  Historically, IRS guidance referred to “Presidentially declared disasters” but Rev. Proc. 2018-58 implemented a change in terminology.

Legal 1031 Exchange Services LLC does not provide tax or legal advice, nor can we make any representations or warranties regarding the tax consequences of any transaction. Taxpayers must consult their tax and/or legal advisors for this information. Unless otherwise expressly indicated, any perceived federal tax advice contained in this article/communication, including attachments and enclosures, is not intended, or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.