IRS and Sandy

The IRS has released information on a variety of programs to help the victims of Hurricane Sandy.

If you have created a charity to benefit hurricane victims, you will still have to complete Form 1023 to apply for tax-exempt status but the IRS will expedite processing. All you have to do is write “Disaster Relief, Hurricane Sandy on the top of the form. If you have already mailed your application, you can fax a request with the same heading and the organization’s name, EIN, contact name and phone number to 513-263-4554. If you are still thinking about starting a charity organization for Sandy, check you Pub. 3833 – Disaster Relief: Providing Assistance through Charitable Organization.

The IRS has also temporarily suspended the rules for low income housing. Owners can rent to Sandy victims who don’t meet the income guideline or just need temporary housing. There is no mention, at this time, how long the suspension will be in effect.

To encourage employers and employees to donate leave time to qualified charities for disaster relief, the IRS will allow these types of contributions to be deductible by employers but not included in the employee’s W-2. Say a taxpayer donates one day of vacation from their paid leave bank, the employer gives the cash equivalent for that day to an eligible charity for the employee. The employer can still deduct the money as wages but not include it as compensation on the employee’s W-2. Of course, the employee can’t include the cost of that day’s wages as a charitable contribution since it wasn’t treated as income.

The IRS has a webpage for all the tax changes for Hurricane Sandy.

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Comments

[Garth@capstoneloans]

It's good that the IRS has put measures in place to make it easier for people who have been affected by Hurricane Sandy to get assistance. It is important for people who are rendering assistance to be able to process all of their documents as quickly as possible.

A lot of older adults have lost their homes as well as all their documents in this storm. I hope that they can get back on their feet as quickly as possible. However I know that the process will be difficult in many cases.