IRS Postpones Deadlines for Taxpayers Affected by Terrorist Attacks in Israel

(Parker Tax Publishing November 2023)

The IRS provided relief under Code Sec. 7508A for persons determined to be affected by the terroristic action in the State of Israel beginning on October 7, 2023. For affected taxpayers, the deadlines for filing tax returns, making tax payments, and performing certain time-sensitive acts that are due to be performed on or after October 7, 2023, and before October 7, 2024, are postponed to October 7, 2024. Notice 2023-71.

Background

Code Sec. 7508A(a) provides the IRS with authority to postpone the time (up to one year) for performing certain acts under the internal revenue laws for a taxpayer determined by the IRS to be affected by a terroristic or military action as defined in Code Sec. 692(c)(2). Code Sec. 692(c)(2) defines a terroristic action as "any terroristic activity which a preponderance of the evidence indicates was directed against the United States or any of its allies."

Rev. Proc. 2004-26 provides that, prior to publishing a determination that an event outside the United States constitutes a terroristic action within the meaning of Code Sec. 692(c)(2), the IRS will ascertain whether the Department of State and the Department of Justice believe that a preponderance of the evidence indicates that the event resulted from terrorist activity directed against the United States or its allies.

In accordance with the procedures described in Rev. Proc. 2004-26, the IRS has determined that the terrorist attacks beginning on October 7, 2023, against the State of Israel (October 7, 2023 Terrorist Attacks) constitute terroristic action within the meaning of Code Sec. 692(c)(2).

Notice 2023-71

The IRS has provided relief under Code Sec. 7508A for taxpayers affected by the October 7, 2023 Terrorist Attacks. The IRS noted that it may provide additional relief in the future.

With respect to "affected taxpayers," the IRS is postponing the due dates for the actions described below (i.e., postponed acts) until October 7, 2024. The IRS has determined that the following types of taxpayers are "affected taxpayers" with respect to the October 7, 2023 Terrorist Attacks:

(1) Any individual whose principal residence, and any business entity or sole proprietor whose principal place of business, is located in the State of Israel, the West Bank or Gaza (covered area);

(2) Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker;

(3) Any individual, business entity or sole proprietor, or estate or trust whose tax return preparer or records necessary to meet a deadline for postponed acts are located in the covered area;

(4) Any spouse of an affected taxpayer, solely with regard to a joint return of two married individuals; and

(5) Any individual visiting the covered area who was killed, injured, or taken hostage as a result of the October 7, 2023 Terrorist Attacks.

The IRS automatically identifies taxpayers whose principal residence or principal place of business is located in the covered area based on previously filed returns and applies relief. Affected taxpayers whose principal residence or principal place of business is not located in the covered area should call the IRS disaster hotline at (866) 562-5227 to request relief. Alternatively, international callers may call (267) 941-1000.

Affected taxpayers have until October 7, 2024, to file tax returns, make tax payments, and perform certain time-sensitive acts listed in Reg. Sec. 301.7508A-1(c)(1) and Rev. Proc. 2018-58, that are due to be performed on or after October 7, 2023, and before October 7, 2024. Any taxpayer acts that are due to be performed on or after October 7, 2023, and before October 7, 2024, are postponed until October 7, 2024. These acts include, but are not limited to:

(1) Filing any return of income tax, estate tax, gift tax, generation-skipping transfer tax, excise tax (other than firearms tax), harbor maintenance tax, or employment tax;

(2) Paying any income tax, estate tax, gift tax, generation-skipping transfer tax, excise tax (other than firearms tax), harbor maintenance tax, or employment tax, or any installment of those taxes;

(3) Making contributions to a qualified retirement plan;

(4) Filing a petition with the Tax Court;

(5) Filing a claim for credit or refund of any tax; and

(6) Bringing suit upon a claim for credit or refund of any tax.

Notice 2023-71 also provides the IRS with additional time to perform certain time-sensitive actions with respect to affected taxpayers. Any government acts described in Reg. Sec. 301.7508A-1(c)(2) that are due to be performed on or after October 7, 2023, and before October 7, 2024, are postponed until October 7, 2024. These acts include:

(1) Assessing any tax;

(2) Giving or making any notice or demand for the payment of any tax, or with respect to any liability to the United States in respect of any tax;

(3) Collecting by the IRS, by levy or otherwise, of the amount of any liability in respect of any tax; and

(4) Bringing suit by the United States, or any officer on its behalf, in respect of any liability in respect of any tax; and allowing a credit or refund of any tax.

For a discussions of postponements of certain acts by taxpayers affected by a disaster, significant fire, or a terroristic or military action, see Parker Tax ¶250,125.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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