Irs Continues To Help Hurricane Katrina Victims

The IRS is often bashed as being unfriendly to taxpayers. In many cases, this reputation is deserved. In relation to Hurricane Katrina victims, it is certainly not.

As is well-known by now, the federal government did its best Keystone Cops imitation following Hurricane Katrina. Frankly, the action or lack thereof was disgraceful. It is somewhat ironic given this fact that one government agency acted swiftly, effectively and with common sense to help the victims of the tragedy. To the surprise of many, that agency was the IRS.

You might wonder how the IRS could possibly help those devastated by the hurricane? In a number of ways. The first step taken by the agency was to extend all tax deadlines out by a year or more. The agency also temporarily terminated all federal gas taxes on diesel fuel in an effort to provide relief to the fuel shortage. What many do not understand is some of these 'dirty diesel? taxes effectively bar the use of such fuel by trucks. By waving the tax, the IRS opened up an entirely new fuel source to help get trucks moving again.

The IRS then took the extraordinary step of trying to educate taxpayers on how they could claim their losses from the hurricane on previously filed tax returns by amending those returns. Yes, the IRS effectively taught people how to go back and pull large amounts from their previously filed tax returns and how to do so quickly. This, of course, put money in their pockets within 30 to 60 days, which compares favorably to FEMA and the rest of the federal government efforts.

Two years after Hurricane Katrina, it would be reasonable to expect the IRS to view the events as being at an end. This, of course, would lead to a situation where victims of the hurricane are required to get back on the tax horse if you will. In truth, the IRS continues to show surprising compassion and flexibility.

The agency has just announced it is extending by one calendar year the time victims of Hurricane Katrina have to sell off vacant land and avoid paying a tax on the gains. The normal time period is two years, which is a rather lengthy period. Given the devastation and slow state of reconstruction in the Gulf region, the IRS is displaying what many did not foresee ? compassion. If it continues to take steps like this, it might just ruin its reputation!

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