Oct 1, 2005 12:00 PM, By Carolyn DeVore, counsel, Cummings & Lockwood LLC, Stamford, Conn.

By: By Carolyn DeVore, counsel, Cummings & Lockwood LLC, Stamford, Conn.

While President Bush and the Federal Emergency Management Agency were suffering scathing criticism for their slow response to the crisis Hurricane Katrina wrought on New Orleans and the Gulf region, the Internal Revenue Service and Congress were quick to announce tax relief for victims of the disaster. Just one day after the storm, the IRS gave taxpayers in areas of Alabama, Florida, Louisiana and Mississippi special relief. It extended tax filing and payment deadlines until Oct. 31 (extended the following week to Jan. 3, 2006 and expanded to include relief workers), abated interest and late filing or late payment penalties that would otherwise apply, and suspended compliance activities. The relief applied to any return, tax payment or tax deposit with an original or extended due date that fell on or after Aug. 29 (Aug. 24 for Florida residents). Congress then took this one step further and on Sept. 21, as part of the Katrina Emergency Tax Relief Act of 2005, extended filing deadlines until Feb. 28, 2006.

This means that estates and trusts making estimated tax payments have until Feb. 28, 2006 to file and make the payments they otherwise would have been required to make by Sept. 15. Filing deadlines also are extended for estates filing federal estate tax returns (otherwise due nine months from date of death), individuals making qualified disclaimers (also usually due nine months from date of death), tax-exempt organizations filing fiscal year income tax returns (otherwise due by the 15th day of the fifth month following the close of their tax year) and charitable organizations seeking a determination of tax-exempt status (otherwise due within 15 months from the end of the month in which the organization was organized). The IRS initiative also includes a promise of expedited review and approval of tax-exempt status requests filed by new charities and foundations specifically organized to provide aid to hurricane victims.

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