Tax Information for Victims of California Wildfires and Other Disasters
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I just got my property tax bill, but my house burned down in the fire. Do I still have to pay?

Oct 16, 2017 |

If your house was destroyed due to a calamity, you may be eligible for property tax relief under Revenue and Taxation Code section 170. Normally, to get this relief you would file a disaster relief claim with your County Assessor and you would file a property tax deferral claim to postpone your payment due date until you receive the corrected tax bill.

Due to the extensive damage from the North Bay fires, Sonoma County is automatically re-assessing impacted properties and will send out corrected property tax bills without individuals needing to file any paperwork with their office.

In Sonoma County the Assessor’s office and the Tax Collector’s office are pro-actively working with Cal Fire and local fire departments to identify all properties that would qualify for this relief and they will automatically send out corrected property tax bills by December 11, 2017. Taxpayers will then have a 30-day deferral period following receipt of the corrected tax bill. If your lender pays your property tax bill, be sure to alert them to the reassessment so they can reduce your monthly impound amount.

Other counties have not yet announced an automatic re-assessment so you should file forms with your respective counties. To qualify for a calamity adjustment, the property must have suffered more than $10,000 worth of damage and the owner must file a claim with the Assessor within twelve (12) months of the date of calamity.

Forms and more information by County can be located following the links below:
• Butte County
• Lake County
• Mendocino County
• Napa County
• Nevada County
• Sonoma County
• Yuba County

IRS Gives Tax Relief to Victims of California Wildfires; Extension Filers Have Until Jan. 31 to File (IR 2017-172)

Oct 13, 2017 | ,

WASHINGTON — Victims of wildfires ravaging parts of California now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

This includes an additional filing extension for taxpayers with valid extensions that run out this coming Monday, Oct. 16.

Currently, the IRS is providing relief to seven California counties: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. Individuals and businesses in these localities, as well as firefighters and relief workers who live elsewhere, qualify for the extension. The agency will continue to closely monitor this disaster and may provide other relief to these and other affected localities. [Editor’s Note: Solano and Orange County were added on 10/16/17]

The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 8, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes originally due during this period.

This includes the Jan. 16, 2018 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected, including the Oct. 31 deadline for quarterly payroll and excise tax returns. Calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017 also qualify for the extra time.

In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due after Oct. 8 and before Oct. 23, if the deposits are made by Oct. 23, 2017. Details on available relief can be found on the disaster relief page on IRS.gov.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes firefighters and workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year) or the return for the prior year (2016). See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Reconstructing Records After a Natural Disaster or Casualty Loss; IRS Provides Tips to Help Taxpayers (FS-2017-11)

Oct 12, 2017 | , ,

Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. After a disaster, taxpayers might need certain records to prove their loss. The more accurately the loss is estimated, the more loan and grant money there may be available.

For taxpayers who have lost some or all of their records during a disaster, there are some simple steps to take that can help. The following information includes steps to take after a disaster so taxpayers can reconstruct their records and prove loss of personal-use and business property.

Tax Records

  • Get free return transcripts immediately by visiting the Get Transcript tool on IRS.gov.
  • To order transcripts by phone, call 800-908-9946 and follow the prompts.
  • To get transcripts of previous years returns by mail, file a Form 4506-T, Request for Transcripts of a Tax Return.
  • To request copies of past returns by mail, file Form 4506, Request for Copy of Tax Return.
  • Write the appropriate disaster designation, such as “HURRICANE HARVEY,” in red letters across the top of Forms 4506-T and 4506 to expedite processing and to waive the normal user fee.

Personal Residence and Real Property
Real property, also called real estate, is land as well as generally anything built on, growing on, or attached to land.

  • Take photographs or videos as soon after the disaster as possible. This helps establish the extent of the damage.
  • Contact the title company, escrow company or bank that handled the purchase of the home to get copies of appropriate documents. Real estate brokers may also be able to help.
  • Use the current property tax statement for land-versus-building ratios if available. If they are not available, owners can usually get copies from the county assessor’s office.
  • Establish a basis or fair market value of the home by reviewing comparable sales within the same neighborhood. This information can be found by contacting an appraisal company or visiting a website that provides home valuations.
  • Check with the mortgage company for copies of appraisals or other information they may have about cost or fair market value in the area.
  • Review insurance policies, as they usually list the value of a building, establishing a base figure for replacement value insurance. For details on how to reach the insurance company, check with the state insurance department.
  • If improvements were made to the home, contact the contractors who did the work to see if records are available. If possible, get statements from the contractors verifying their work and cost.
    • Get written accounts from friends and relatives who saw the house before and after any improvements. See if any of them have photos taken at get-togethers.
    • If there is a home improvement loan, get paperwork from the institution that issued the loan. The amount of the loan may help establish the cost of the improvements.
  • For inherited property, check court records for probate values. If a trust or estate existed, contact the attorney who handled the estate or trust.
  • If no other records are available, check the county assessor’s office for old records that might address the value of the property.

Vehicles

There are several resources that can help determine the current fair market value of most cars on the road. These resources are all available online and at most libraries:

  • Kelley’s Blue Book
  • National Automobile Dealers Association
  • Edmunds

Additionally, call the dealer where the car was purchased and ask for a copy of the contract. If this is not available, give the dealer all the facts and details, and ask for a comparable price figure. If making payments on the car, check with the lien holder.

Personal Property
It can be difficult to reconstruct records showing the fair market value of some types of personal property. Here are some things to consider when cataloguing lost items and their values:

  • Look on mobile phones for pictures that were taken in the home that might show the damaged property in the background before the disaster.
  • Check websites that can help establish the cost and fair market value of lost items.
  • Support the valuation with photographs, videos, canceled checks, receipts or other evidence.
  • If items were purchased using a credit card or debit card, contact the credit card company or bank for past statements. Credit card companies and banks often provide user’s access to these statements online.

If there are no photos or videos of the property, a simple method to help remember what items were lost is to sketch pictures of each room that was impacted:

  • Draw a floor plan showing where each piece of furniture was placed ? include drrawers, dressers and shelves.
  • Sketch pictures of the room looking toward any shelves or tables showing their contents.
  • These do not have to be professionally drawn, just functional.
  • Take time to draw shelves with memorabilia on them.
  • Be sure to include garages, attics, closets, basements and items on walls.

Business Records

  • To create a list of lost inventories, get copies of invoices from suppliers. Whenever possible, the invoices should date back at least one calendar year.
  • Check mobile phones or other cameras for pictures and videos taken of buildings, equipment and inventory.
  • For information about income, get copies of bank statements. The deposits should closely reflect what the sales were for any given time period.
    • Get copies of last year’s federal, state and local tax returns. This includes sales tax reports, payroll tax returns and business licenses from the city or county. These will reflect gross sales for a given time period.
  • If there are no photographs or videos available, sketch an outline of the inside and outside of the business location. Then start to fill in the details of the sketches. For example, for the inside of the building, record where equipment and inventory was located. For the outside of the building, map out the locations of items such as shrubs, parking, signs and awnings.
    • If the business was pre-existing, go back to the broker for a copy of the purchase agreement. This should detail what was acquired.
    • If the building was newly constructed, contact the contractor or a planning commission for building plans.