IRS Tax Relief in the wake of Hurricane Harvey

From the Desk of Lauran L Stevenson

IRS Tax Relief in the wake of Hurricane Harvey

On Tuesday, the IRS made an announcement outlining several relief provisions for victims of Hurricane Harvey. One of the relief provisions will allow for any employee to forgo vacation time, sick and personal leave in exchange for cash payments. The employer will give these cash payments to a charitable organization providing relief for the victims of Hurricane Harvey. The employer will be allowed to deduct these cash payments as a business expense.

This is not the only relief provided to the victims of Hurricane Harvey. The IRS also announced that 401(k)s, and similar employer-sponsored retirement plans, can make loans and hardship distributions to victims and members of their family. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under these liberalized procedures. The IRS will be relaxing many of the procedural and administrative rules that normally apply to hardship distributions so that victims can have quicker access with limited red tape.

The IRS has also cautioned against fake charities and scams relating to Hurricane Harvey. With the influx of generosity from taxpayers, the IRS advises taxpayers not to fall victim to fraudulent scammers posing as charity groups.

The IRS cautions people who wish to make donations to follow these steps:

• Be sure to donate to recognized charities.
• Be wary of charities with names that are similar or familiar to nationally known organizations.
• Scammers will use fake emails or websites that sounds or look like legitimate organizations.
• Never give or send cash for security and tax purposes.
• Do not give out personal or financial information, such as credit card information, social security numbers to anyone who solicits a contribution.
• If you question the legitimacy of a charitable organization, please consult IRS Publication 526, Charitable Contributions.