Mandatory 60-Day Postponement of Certain Tax-Related Deadlines by Reason of a Federally Declared Disaster
| Published date | 11 June 2021 |
| Record Number | 2021-12311 |
| Section | Rules and Regulations |
| Court | Internal Revenue Service |
Federal Register, Volume 86 Issue 111 (Friday, June 11, 2021)
[Federal Register Volume 86, Number 111 (Friday, June 11, 2021)]
[Rules and Regulations]
[Pages 31146-31151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12311]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[TD 9950]
RIN 1545-BP98
Mandatory 60-Day Postponement of Certain Tax-Related Deadlines by
Reason of a Federally Declared Disaster
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
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SUMMARY: This document contains final regulations relating to the new
mandatory 60-day postponement of certain time-sensitive tax-related
deadlines by reason of a federally declared disaster. This document
also contains final regulations clarifying the definition of
``federally declared disaster.'' These final regulations affect
individuals who reside in or were killed or injured in a disaster area,
businesses that have a principal place of business in a disaster area,
relief workers who provide assistance in a disaster area, or any
taxpayer whose tax records necessary to meet a tax deadline are located
in a disaster area.
DATES:
Effective Date: These regulations are effective on June 11, 2021.
Applicability Date: The date of applicability for the amendment to
the Procedure and Administration Regulations under section 7508A is
December 21, 2019, as explained below in SUPPLEMENTARY INFORMATION.
The date of applicability for the amendment to the Income Tax
Regulations under section 165 of the Code to clarify the definition of
the term ``federally declared disaster'' is June 11, 2021.
FOR FURTHER INFORMATION CONTACT: Andrew C. Keaton at (202) 317-5404
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
[[Page 31147]]
Background
Section 205 of the Taxpayer Certainty and Disaster Tax Relief Act
of 2019, enacted as Division Q of the Further Consolidated
Appropriations Act, 2020, Public Law 116-94, 133 Stat. 2534, 3226,
amended section 7508A of the Code, relating to the discretionary
authority of the Secretary of the Treasury or her delegate (Secretary)
to postpone certain time-sensitive tax deadlines by reason of a
federally declared disaster, by adding section 7508A(d). This provision
provides qualified taxpayers a mandatory 60-day period that is to be
disregarded ``in the same manner as a period specified under [section
7508A(a)].''
On January 13, 2021, the IRS published in the Federal Register a
notice of proposed rulemaking (REG-115057-20, 86 FR 2607) to interpret
and implement sections 165(i)(5) and 7508A(d). Five responsive written
comments were received. No commenter requested a public hearing, so
none was held.
As described more fully in the preamble to the proposed
regulations, section 7508A(d) is ambiguous in at least two important
respects--the time-sensitive acts to be postponed (beyond the pension-
related actions described in section 7508A(d)(4)) are not specified and
it is unclear how the mandatory 60-day postponement period is to be
calculated when the disaster declaration specified in section 7508A(d)
does not contain an incident date. The legislative history is also
insufficient to explain these areas of ambiguity.
These final regulations amend the Procedure and Administration
Regulations (26 CFR part 301) under section 7508A and the Income Tax
Regulations (26 CFR part 1) under section 165 to clarify the definition
of the term ``federally declared disaster.'' As described further
below, the Department of the Treasury (Treasury Department) and the IRS
have modified proposed Sec. 301.7508A-1(g)(4)(iii), Example (3), in
these final regulations to better illustrate the calculation of the
mandatory 60-day postponement period and to correct typographical
errors. No other changes have been adopted.
Comments on the Proposed Regulations
Section 1.165-11(b)(1)
The proposed regulations provided that a federally declared
disaster includes both a major disaster and an emergency declared under
sections 401 or 501, respectively, of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (Stafford Act), Public Law 100-
707,102 Stat. 4689 (1988).
One commenter said it approved of the proposed regulations
including emergency declarations in the definition of a federally
declared disaster under section 165(i)(5)(A). However, another
commenter was critical of this portion of the proposed regulations and
recommended that it be stricken. This second commenter said emergency
declarations are governed by a different set of rules than major
disaster declarations, pointing out that emergency declarations (i) do
not need to be preceded by a governor's request for Stafford Act relief
(but may instead be declared sua sponte by the President), (ii) may
only result (if not followed up by a major disaster declaration) in
Federal assistance to local governmental entities (as opposed to
assistance to individuals), and (iii) may be issued before a disaster.
This commenter further opined that President Trump's letter of March
13, 2020, declaring an emergency under the Stafford Act with respect to
the COVID-19 pandemic, was not authorized by Congress to serve as a
disaster declaration under sections 165(i)(5)(A) and 7508A of the Code.
The comment from the second commenter is not adopted in the final
regulations. In the Explanation of Provisions section of the preamble
to the proposed regulations, Part III. Federally Declared Disasters,
this issue is already addressed in detail. There is no provision in the
Stafford Act to declare a ``disaster.'' The legislative history of the
Stafford Act indicates that the term ``disaster'' is an umbrella term
that includes both an emergency and a major disaster. The Conference
Report to the Disaster Relief and Emergency Assistance Act of 1974,
Public Law 93-288, 88 Stat. 143 (1974), clarified the definitional
section of the Stafford Act, stating: ``It was the intention of the
conferees not to define the term `disaster' specifically; whenever used
in this legislation such term includes an emergency or a major
disaster.'' H.R. Rep. 93-1037, p. 26 (May 13, 1974).
The opening section of the Stafford Act, titled ``Congressional
findings and declarations,'' uses the generic term ``disaster'' in
laying out the key congressional findings and declarations that
underlie the rest of the chapter's provisions. Stafford Act section
101(a), 42 U.S.C. 5121(a). In multiple revenue rulings, the IRS has
provided that, for the purposes of section 165(i), a federally declared
disaster includes an emergency or a major disaster declared under the
Stafford Act. Several of these revenue rulings are cited in the
preamble to the proposed regulations.
The differences noted by the commenter between emergencies and
major disasters under the Stafford Act are not material to their
treatment under sections 165(i)(5)(A) and 7508A of the Code. Most
disaster declarations announced by the Federal Emergency Management
Agency (FEMA) for particular states also provide only public
assistance, and no individual assistance, to particular counties in the
state under the Stafford Act. In addition, most emergency declarations
announced by FEMA are under section 501(a) of the Stafford Act, and
begin with a request from a governor or other chief executive of a
state, territory, or tribal government. As noted in the preamble to the
proposed regulations, it is rare for an emergency declaration to be
made without such a request. The President is authorized to make an
emergency declaration under section 501(b) of the Stafford Act when the
United States will have the primary responsibility for response to the
emergency. There is no difference in the need for affected persons in a
state threatened with a disaster to receive relief from time-sensitive
deadlines to perform specified acts under the Code when the request for
such relief originates with the state's governor or is independently
raised by the President. Consequently, the final regulations make no
changes to this portion of the proposed regulations.
Section 301.7508A-1(g)(1)-(2)
The proposed regulations provided that (excluding the pension-
related acts described in section 7508A(d)(4)) the time-sensitive tax
acts that are postponed for the mandatory 60-day postponement period
are the acts, if any, that the Secretary determines to be postponed
under section 7508A(a) or (b).
One commenter expressed a general concern that this provision had
the potential to reduce section 7508A(d) to a nullity. A second
commenter expressed its concerns specifically in terms of what it
contended was a clear reading of the statute and its legislative
history. This commenter said it was clear that Congress intended to
postpone the timely performance of all of the time-sensitive tax acts,
both taxpayer and government acts, listed in section 7508(a)(1) of the
Code. However, this second commenter recommended that the final
regulations provide that the government may take advantage of the
postponement periods for government-initiated actions only if a
taxpayer first acts in reliance on the ``automatic'' postponement
periods for the taxpayer's time-sensitive tax acts.
[[Page 31148]]
A third commenter agreed with the Secretary's characterizations of
the statute and legislative history as ambiguous on the issues of which
time-sensitive tax acts (other than the pension-related tax acts
described in section 7508A(d)(4)) are postponed under section 7508A(d)
and of which declared disasters are subject to the mandatory 60-day
postponement period under section 7508A(d). This commenter approved of
the solution to these ambiguities that was reflected in the proposed
regulations, in terms of which time-sensitive tax acts would be
postponed. This commenter said section 7508A(d) was a poorly-worded
statute, that the legislative history of the provisions contained
contradictions, and the result was that section 7508A(d)(1) leaves no
(non-pension) time-sensitive tax acts for section 7508A(d) to operate
upon, unless or until the Secretary exercises her powers under section
7508A(a).
The third commenter noted also that for the year 2017, the IRS
provided relief under section 7508A(a) in response to only 14 of the 59
major disaster declarations announced by FEMA that year. If all major
disaster declarations automatically entitled all taxpayers in disaster
areas to timing relief under section 7508A(d), the commenter noted that
there would be a dramatic increase in the number of disasters leading
to postponements of time-sensitive tax acts. On these issues, the third
commenter concluded that the proposed regulations properly preserved
the discretion of the IRS to determine which declared disasters should
result in any type of disaster relief and of which time-sensitive tax
acts should be postponed under section 7508A.
The comments from the first two commenters on this issue are not
adopted in the final regulations, while the approving comments of the
third commenter were already reflected in the proposed regulations. As
explained more fully in the Explanation of Provisions section of the
preamble to the proposed regulations, Part I. Time-Sensitive Tax Acts,
and as noted by the third commenter described above, except for the
rules regarding pensions described in section 7508A(d)(4), section
7508A(d), by its terms, does not specify the time-sensitive tax acts to
be postponed during the mandatory 60-day postponement period. Instead,
section 7508A(d)(1) provides that the mandatory 60-day postponement
period ``shall be disregarded in the same manner as a period specified
under [section 7508A(a)].'' Section 7508A(a) is not self-executing, but
rather, requires a determination by the Secretary to specify the acts
to be postponed. As a result, the cross-reference to section 7508A(a)
in section 7508A(d)(1) operates to require the same determination by
the Secretary as a prerequisite to determining the acts to which the
mandatory 60-day postponement period applies. This interpretation gives
full effect to the statutory language and does not reduce section
7508A(d) to a nullity, because that section still imposes a mandatory
period for postponement and establishes a new category of persons
eligible for relief--the ``qualified taxpayers'' defined in section
7508A(d)(2). The final regulations make no changes to Sec. 301.7508A-
1(g)(1) and (2) of the proposed regulations.
Section 301.7508A-1(g)(3)(i)
Section 301.7508A-1(g)(3)(i) of the proposed regulations tracked
section 7508A(d)(1) and (d)(5) in describing how the mandatory 60-day
postponement period for federally declared disasters will be calculated
and how the calculation of that mandatory postponement period will
interact with the Secretary's discretionary postponement period (if
any) under section 7508A(a) and (b). The Explanation of Provisions
section of the preamble to the proposed regulations, Part II.
Calculation of the Mandatory 60-Day Postponement Period, identified a
120-day postponement period from the beginning incident date of a
disaster announced by FEMA as the usual postponement period provided by
the IRS for those disasters where the IRS exercises its discretion
under section 7508A(a) or (b) to postpone any time-sensitive tax acts.
Consequently, most mandatory 60-day postponement periods under
section 7508A(d) will be calculated to run concurrently with the 120-
day postponement period the IRS generally provides under section
7508A(a) or (b). Two commenters noted that section 7508A(d)(1) and the
proposed regulations did not provide a clear rule for calculating the
mandatory 60-day postponement period when there was more than one
disaster declaration issued for the same disaster in a particular state
or when any disaster declaration was amended to provide any new or
modified incident dates (earliest or latest) that were missing or
different from when the first disaster declaration for a disaster in a
state was announced by FEMA. Two commenters suggested potential
alternative methods of making calculations of the mandatory 60-day
postponement period more certain when there are multiple disaster
declarations or disaster declarations that are amended by FEMA for the
earliest or latest incident dates described in section 7508A(d)(1)(A)
and (B).
One commenter claimed that a literal reading of section 7508A(d)(1)
creates challenges for indefinite disasters, such as the COVID-19
pandemic, because the statute could be interpreted to postpone a
taxpayer's deadlines ``indefinitely until some unknown point in time
that is long after the disaster began.'' To avoid this ``unworkable
application'' of the statute, this commenter recommended that if the
initial disaster declaration does not expressly identify the latest
incident date for a disaster, then section 7508A(d) should be
interpreted as automatically providing a postponement period until the
date that is 60 days after the earliest incident date specified in a
disaster declaration. However, the statute mitigates the commenter's
concern by directing that the postponement period under section
7508A(d) ``shall be disregarded in the same manner as a period
specified under subsection (a).'' That provision ensures that the
Secretary retains the same discretion as she has under section 7508A(a)
to determine what time-sensitive tax acts, if any, will be postponed.
A second commenter noted what it characterized as a pick-and-choose
problem and an amendment problem with the method of calculating the
mandatory 60-day postponement period provided for in the proposed
regulations and recommended the Secretary adopt one of several
alternative bright-line rules it suggested for making the calculation
period more predictable.
This second commenter noted there was a potential pick-and-choose
problem among multiple potential FEMA-announced disaster declarations,
because the Treasury Department and the IRS propose to treat FEMA-
announced emergency declarations (as well as major disaster
declarations) under the Stafford Act as federally declared disasters
under sections 165 and 7508A of the Code. This commenter's
recommendation to strike proposed amended regulation Sec. 1.165-
11(b)(1) is discussed and rejected in the preamble discussion of this
issue above.
Alternatively, the second commenter recommended that the final
regulations reflect a bright-line rule to address potential multiple
declarations, such as a first-out rule (the first issued declaration
controls), a rule that a later major disaster declaration controls over
an earlier emergency declaration, or a rule that the issue date of an
emergency declaration is the earliest incident date for section
7508A(d)(1)'s mandatory 60-day postponement period.
[[Page 31149]]
The second commenter further recommended in this section of the
final regulations that the Treasury Department and the IRS provide a
bright-line rule concerning the effect of potential amendments to an
initial FEMA announced disaster declaration on how the mandatory 60-day
postponement period is calculated. The additional potential bright-line
alternatives suggested by the second commenter were that (i) future
amendments will not affect how the mandatory period is calculated, or
(ii) only amendments made within a certain amount of time (say one
year) will affect the computation of the mandatory period.
The Treasury Department and the IRS appreciate the predictability
offered by the bright-line rules suggested by the second commenter.
Nevertheless, the statutory language providing for a mandatory period
beginning on the earliest incident date specified in the disaster
declaration and ending on the date which is 60 days after the latest
incident date so specified is capable of being applied as written.
While amendments to disaster declarations and shifting ``latest''
incident dates can cause confusion, the intent of the statute is to
ensure that relief is provided throughout the disaster period, assuming
such a period is identified in the disaster declaration and the
Secretary has determined that postponement of time-sensitive tax acts
is warranted. As a result, the comment on this issue is not adopted in
the final regulations.
Section 301.7508A-1(g)(3)(ii)(A)
The proposed regulations provided that in no event will the
mandatory 60-day postponement period be calculated to exceed one year.
One commenter stated that this portion of the proposed regulations
should be removed because it lacks any basis in the text or legislative
history of section 7508A(d)(1) or (d)(4).
The comment on this issue is not adopted in the final regulations.
As stated in the Explanation of Provisions section of the preamble to
the proposed regulations, Part II. Calculation of the Mandatory 60-Day
Postponement Period, it defies logic for the Secretary's discretionary
postponement period under section 7508A(a) to be limited to ``a period
of up to 1 year,'' and there be no limit on the mandatory 60-day
postponement period under section 7508A(d). Interpreting section
7508A(d) to allow postponement periods for more than 1 year would be
contrary to the directive of section 7508A(d)(1) that the mandatory 60-
day postponement period must ``be disregarded in the same manner as a
period specified under [section 7508A(a)].'' The final regulations make
no change to Sec. 301.7508A-1(g)(3)(ii)(A) of the proposed
regulations.
Section 301.7508A-1(g)(4)(iii) Example (3)
The proposed regulations provided an Example (3) concerning a
continuing disaster declaration involving wildfires that was later
amended by a subsequent FEMA announcement of a latest incident date for
the disaster. This example contained typographical errors, including a
misnumbering--``(5)'' instead of ``(4)''--of the subparagraph for the
four examples and referring to the taxpayer in the example variously as
``Individual C'' and ``Individual D.''
One commenter further noted that the intended rules, if any, which
Example (3) was meant to illustrate were not described in the portions
of the proposed regulations which precede the Examples section.
Example (3) is intended to illustrate the calculation of the
mandatory 60-day postponement period in the event of an ongoing
disaster with multiple declarations and shifting ``latest'' incident
dates described in Sec. 301.7508A-1(g)(3) of these final regulations.
The Treasury Department and the IRS have modified Example (3) in these
final regulations, in consideration of the comment above as well as the
comments received on Sec. 301.7508A-1(g)(3)(i), to better illustrate
the calculation of the mandatory 60-day postponement period and to
correct typographical errors.
Section 301.7508A-1(h)(2)
The proposed regulations provided that the final regulations shall
apply to all disasters declared on or after December 21, 2019.
One commenter requested not only that the final regulations not be
retroactive to the effective date of section 7508A(d), but that the
final regulations provide relief to any individuals or employee benefit
plans that took actions (or failed to take actions) based on a good
faith and reasonable interpretation of the postponement relief provided
in section 7508A. The commenter further requested that such good faith
relief be available for at least 60 days after the final regulations
are published in the Federal Register.
The Applicability Date discussion in the preamble to the proposed
regulations clearly indicated the intention of the Treasury Department
and the IRS to rely on the provisions of section 7805(b)(2) of the Code
for the applicability date of these final regulations. Section
7805(b)(2) provides that regulations filed or issued within 18 months
of the date of enactment of the statutory provision to which the
regulations relate are not prohibited from applying retroactively to
the date of enactment. Section 7508A(d) was enacted on December 20,
2019, and these final regulations have been filed or issued within 18
months of that date of enactment. The proposed regulations were clear
in stating that the Treasury Department and the IRS intended for the
final regulations to apply to any disasters that were declared on or
after December 21, 2019. These final regulations do not adopt the
commenter's request to modify Sec. 301.7508A-1(h)(2) of the proposed
regulations.
New Rule Proposal
One commenter requested that the final regulations ``confirm'' that
all forms of deadline relief requested under section 7508A are optional
for affected taxpayers. In particular, the commenter focused on
deadlines arising under employee benefit plans. In some cases, the
application of these deadlines may affect both the plan and the
participants. After consideration, the Treasury Department and the IRS
have concluded that the suggestions made in this comment are beyond the
intended scope of the proposed regulations. Consequently, the
suggestions are not adopted in these final regulations.
Modifications of Proposed Regulations
Section 301.7508A-1(g)(4)(iii) Example (3)
Example (3) is modified to better illustrate the calculation of the
mandatory 60-day postponement period in the event of multiple
declarations and shifting ``latest'' incident dates, and to correct
typographical errors.
Applicability Dates
For date of applicability for the amendment to the Procedure and
Administration Regulations under section 7508A, see Sec. 301.7508A-
1(h), which provides that the regulations promulgated by this Treasury
decision are applicable for federally declared disasters that are
declared on or after December 21, 2019, as explained in the preamble to
the proposed regulations (REG-115057-20) published in the Federal
Register (86 FR 2607), because section 7805(b)(2) of the Internal
Revenue Code (Code) provides that regulations filed or issued within 18
months of the date of the enactment of
[[Page 31150]]
the statutory provision to which they relate may apply to taxable
periods prior to those described in section 7805(b)(1) and these final
regulations are being published within 18 months of the enactment of
section 7508A(d) on December 20, 2019.
The date of applicability for the amendment to the Income Tax
Regulations under section 165 of the Code to clarify the definition of
the term ``federally declared disaster'' is June 11, 2021.
Special Analyses
Certain IRS regulations, including these, are exempt from the
requirements of Executive Order 12866, as supplemented and affirmed by
Executive Order 13563. Therefore, a regulatory assessment is not
required.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it
is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. The
regulations clarify how the Secretary may postpone certain time-
sensitive tax deadlines by reason of a federally declared disaster.
Such postponements provide more time for affected taxpayers to complete
time-sensitive acts than they otherwise would have under the internal
revenue laws. In addition, the regulations do not impose a collection
of information burden on any person, including small entities, for
purposes of the Regulatory Flexibility Act (5 U.S.C. chapter 6).
Accordingly, the Secretary certifies that the regulations will not have
a significant economic impact on a substantial number of small
entities. Pursuant to section 7805(f) of the Internal Revenue Code, the
notice of proposed rulemaking preceding these final regulations was
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comments on its impact on small business, and no
comments were received.
Drafting Information
The principal authors of these final regulations are Andrew C.
Keaton and William V. Spatz of the Office of Associate Chief Counsel
(Procedure and Administration). However, other personnel from the
Treasury Department and the IRS participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 301 are amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.165-11 is amended by revising paragraphs (b)(1) and
(h) to read as follows:
Sec. 1.165-11 Election to take disaster loss deduction for preceding
year.
* * * * *
(b) * * *
(1) A federally declared disaster means any disaster subsequently
determined by the President of the United States to warrant assistance
by the Federal Government under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (Stafford Act). A federally declared
disaster includes both a major disaster declared under section 401 of
the Stafford Act and an emergency declared under section 501 of the
Stafford Act.
* * * * *
(h) Applicability dates--(1) In general. Except as provided in
paragraph (h)(2) of this section, this section applies to elections and
revocations that are made on or after October 16, 2019.
(2) Paragraph (b)(1) of this section. The second sentence of
paragraph (b)(1) of this section applies to elections and revocations
that are made on or after June 11, 2021.
PART 301--PROCEDURE AND ADMINISTRATION
0
Par. 3. The authority citation for part 301 continues to read in part
as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 4. Section 301.7508A-1 is amended by revising paragraph (g) and
adding paragraph (h) to read as follows:
Sec. 301.7508A-1 Postponement of certain tax-related deadlines by
reasons of a federally declared disaster or terroristic or military
action.
* * * * *
(g) Mandatory 60-day postponement--(1) In general. In addition to
(or concurrent with) the postponement period specified by the Secretary
in an exercise of the authority under section 7508A(a) to postpone
time-sensitive acts by reason of a federally declared disaster,
qualified taxpayers (as defined in section 7508A(d)(2)) are entitled to
a mandatory 60-day postponement period during which the time to perform
those time-sensitive acts is disregarded in the same manner as under
section 7508A(a). The rules of this paragraph (g)(1) apply with respect
to a postponement period specified by the Secretary under section
7508A(b), to postpone acts as provided in section 7508A(d)(4). Except
for the acts set forth in paragraph (g)(2) of this section, section
7508A(d) does not apply to postpone any acts.
(2) Acts postponed. The time-sensitive acts that are postponed for
the mandatory 60-day postponement period are the acts determined to be
postponed by the Secretary's exercise of authority under section
7508A(a) or (b). In addition, in the case of any person described in
section 7508A(b), the time-sensitive acts postponed for the mandatory
60-day postponement period include those described in section
7508A(d)(4):
(i) Making contributions to a qualified retirement plan (within the
meaning of section 4974(c)) under section 219(f)(3), 404(a)(6),
404(h)(1)(B), or 404(m)(2);
(ii) Making distributions under section 408(d)(4);
(iii) Recharacterizing contributions under section 408A(d)(6); and
(iv) Making a rollover under section 402(c), 403(a)(4), 403(b)(8),
or 408(d)(3).
(3) Calculation of mandatory 60-day postponement period--(i) In
general. The mandatory 60-day postponement period begins on the
earliest incident date specified in a disaster declaration for a
federally declared disaster and ends on the date that is 60 days after
the latest incident date specified in the disaster declaration. In
accordance with section 7508A(d)(5), the mandatory 60-day postponement
period under section 7508A(d) runs concurrently with the postponement
period determined by the Secretary in exercising discretion under
section 7508A(a) or (b) if the period determined by the Secretary is
equal to or longer than 60 days after the latest incident date. If the
period determined by the Secretary in exercising discretion under
section 7508A(a) or (b) ends prior to 60 days after the latest incident
date, in accordance with section 7508A(d)(5), the mandatory 60-day
postponement period will run concurrently for the length of the period
determined by the Secretary under section 7508A(a) or (b) and then
continue running in addition to the period determined by the Secretary
under section 7508A(a) or (b).
[[Page 31151]]
(ii) Limitations on the mandatory 60-day postponement period. (A)
In no event will the mandatory 60-day postponement period be calculated
to exceed one year.
(B) In the event the Secretary determines to postpone time-
sensitive acts pursuant to a declaration establishing a federally
declared disaster for purposes of section 7508A that does not specify
an incident date, there is no mandatory postponement period under
section 7508A(d). In such cases, the only postponement period will be
the period determined by the Secretary under section 7508A(a) or (b).
(4) Examples. The rules of this paragraph (g) are illustrated by
the following examples:
(i) Example (1). Individual A lives in a state that experienced
severe but isolated tornado damage on March 15. On March 20, FEMA
issued a Federal Register Notice announcing a major disaster
declaration approved by the President for the state where Individual A
lives, describing the incident date for the tornado as March 15. Based
upon that major disaster declaration, the IRS published a news release
identifying the taxpayers (by county) affected by the disaster for
purposes of section 7508A and specifying the time-sensitive acts that
are postponed and a period of postponement from March 15 through July
31, pursuant to section 7508A(a). The county where Individual A lives
was included in the news release. Under section 7508A(d), the mandatory
60-day postponement period that Individual A is entitled to begins on
March 15 and ends 60 days after March 15, on May 14. The mandatory
postponement period applies to the same time-sensitive acts and runs
concurrently with the relief the IRS provided to Individual A under
section 7508A(a).
(ii) Example (2). Individual B lives in a coastal state which
experienced harmful effects from a hurricane that began to affect the
weather in his state on August 15 and ceased to be a weather factor in
his state on August 19. On August 22, FEMA issued a Federal Register
Notice announcing a major disaster declaration approved by the
President, determining that the coastline counties in the state,
including the county where Individual B lives, were severely affected
and that these counties were entitled to both individual assistance and
public assistance. The major disaster declaration specified the
earliest incident date for the hurricane in the state where Individual
B lives as August 15 and the latest incident date as August 19. Based
upon that major disaster declaration, the IRS published a news release
identifying the taxpayers affected by the disaster for purposes of
section 7508A and specifying the time-sensitive acts that are postponed
and a period of postponement from August 15 through December 31,
pursuant to section 7508A(a). Under section 7508A(d), the mandatory 60-
day postponement period that Individual B is entitled to begins on
August 15 and ends 60 days after August 19, on October 18. The
mandatory postponement period applies to the same time-sensitive acts
and runs concurrently with the relief the IRS provided to Individual B
under section 7508A(a).
(iii) Example (3). Individual C lives in a county of a state that
is experiencing ongoing wildfires. On August 14, FEMA issued a Federal
Register Notice announcing an emergency declaration approved by the
President to make public assistance available under the Stafford Act to
local governments to fight the wildfires. This declaration specified an
earliest incident date of August 14 and no latest incident date. On
August 17, FEMA issued a Federal Register Notice announcing a major
disaster declaration approved by the President for the same wildfires
incident, announcing that the residents of the county where Individual
C lives were eligible to receive individual assistance under the
Stafford Act. This declaration specified August 15 as the earliest
incident date and described the incident period as ongoing. Based upon
that major disaster declaration, the IRS exercised its discretion under
section 7508A(a) to publish a news release identifying the taxpayers
(by county) affected by the wildfires disaster for purposes of section
7508A and specifying both the time-sensitive acts that are postponed
and a period of postponement from August 15 through December 15.
Following the initial news release, the wildfires disaster remained
ongoing, with no ending incident date specified, for several months.
The IRS published a second news release postponing the time-sensitive
acts through January 15. FEMA subsequently amended the major disaster
declaration to specify the latest incident date of November 19. Because
the IRS acted in its discretion to provide relief in response to the
major disaster declaration, and not to provide relief in response to
the emergency declaration, the mandatory 60-day postponement period
that Individual C is entitled to under section 7508A(d) begins on
August 15, the earliest incident date specified in the major disaster
declaration, and ends 60 days after the latest incident date of
November 19. The mandatory postponement period applies to the same
time-sensitive acts and runs concurrently with the relief the IRS
provided to Individual C under section 7508A(a), and ends on January
18, which is 60 days after the latest incident date and three days
beyond the postponement period specified by the IRS under section
7508A(a) in its news release.
(iv) Example (4). Individual D lives in the United States, which is
experiencing a nationwide emergency as a result of its residents being
exposed to a highly infectious and dangerous pandemic disease. On March
13, the President declared a nationwide emergency under section 501(b)
of the Stafford Act. The pandemic became a federally declared disaster
for purposes of section 7508A on March 13, however, no incident date
was specified in the President's emergency declaration. Pursuant to the
President's March 13 emergency declaration, the IRS published several
notices identifying the taxpayers affected by the disaster for purposes
of section 7508A and specifying the time-sensitive acts that are
postponed and a period of postponement that generally ran from April 1
through July 15, pursuant to section 7508A(a). Because, in this
circumstance, the emergency declaration pursuant to which the notices
were published did not specify an incident date, there is no mandatory
postponement period under section 7508A(d). The only postponement
period is the period determined by the Secretary pursuant to the
discretionary authority under section 7508A(a).
(h) Applicability dates--(1) In general. Except as provided in
paragraph (h)(2) of this section, this section applies to disasters
declared after January 15, 2009.
(2) Paragraph (g) of this section. Paragraph (g) of this section
applies to disasters declared on or after December 21, 2019.
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement.
Approved: May 25, 2021.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2021-12311 Filed 6-10-21; 8:45 am]
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