FEA alert: 45 and 180-day extensions for disaster areas in New Jersey and West Virginia

The FEA has issued an important alert for businesses operating in areas of New Jersey and West Virginia affected by recent heavy storms.

The IRS has issued extension Notices for the following disaster areas (the Covered Disaster Areas) for storms beginning on March 12th (disaster dates are in bold) :

New Jersey: Atlantic, Bergen, Cape May, Essex, Gloucester, Mercer, Middlesex, Monmouth, Morris, Passaic, Somerset, and Union

West Virginia: Fayette, Greenbrier, Kanawha, Mercer and Raleigh

[Note that the IRS may add additional areas later as FEMA adds them. If you are near the Covered Disaster Area, you should check the disaster announcement website for updates. The FEA will not issue announcements if more areas are added.]

Both of the following criteria must be met to get the extension under Revenue Procedure 2007-56, section 17:

(1) The taxpayer is located in the Covered Disaster Area or is otherwise an affected taxpayer as defined in the Notice, regardless of where the relinquished property or replacement property is located, or otherwise has difficulty meeting the exchange deadlines under the conditions in Revenue Procedure 2007-56, section 17; AND

(2) The relinquished property was transferred (or the parked property was acquired by the EAT in a reverse exchange under Revenue Procedure 2000-37) on or before the disaster date listed above.

IF the taxpayer meets these criteria, THEN any 45 day or 180 day deadline that falls on or after the disaster date is extended to 120 days from such deadline. Note the date may not be extended beyond one year or the due date (including extensions) of the tax return for the year of the disposition of the relinquished property (typically, if an extension was filed, 9/15 for corporations and 10/15 for other taxpayers)).

The FEA advises potentially affected companies to see Revenue Procedure 2007-56, Section 17, as well as the IRS Disaster Tax Relief site for further details.