South Carolina CPA Association Issues Statement on Hurricane Florence

The South Carolina Association of CPAs is advising its members our members to be prepared for Hurricane Florence and its possible effects. It will provide updates on SCACPA functions and emergency preparedness throughout the week.

SCACPA recognizes that Hurricane Florence has the potential to significantly impact areas of South Carolina, and we will be reaching out to legislators, SC DOR and the IRS about tax relief as needed.

As of Monday, Sept. 10, South Carolina Gov. Henry McMaster has declared a state of emergency and has submitted a request for a Federal Emergency Declaration in anticipation of any possible impacts from Hurricane Florence. McMaster has ordered evacuations for the coast beginning noon Tuesday, and lane reversals on major roads will facilitate the evacuations. State offices and schools will be closed in affected counties.

In light of Tuesday’s mandatory evacuations along the South Carolina coast, SCACPA has reached out to the SC DOR and the Governor’s Office to communicate the need for tax filing extensions for the deadlines of Monday, Sept. 17. We will be sure to share their decision once it is announced.

While we hope Hurricane Florence will greatly diminish on its path, we will err on the side of caution and begin preparations for any disruptions. Watch this page and SCACPA social media for developments.

THE IMPORTANCE OF A FEDERALLY DECLARED DISASTER AREA

Taxpayers who are seeking relief by the IRS must first be in a locale designated as a covered disaster area that is federally declared. Areas can retroactively be designated as a covered disaster area, and SCACPA has previously worked to get areas eligible in the wake of Hurricanes Matthew and Irma.

Under Code Sec. 165(i)(5), “Federally Declared Disaster” mean any disaster determined by the President of the United States to warrant assistance by the Federal government. The IRS will include within the scope of its relief any area designated by the Federal Emergency Management Agency (FEMA).

Certain casualty loss deductions offered directly under Code Sec. 165 are available irrespective of designation as a disaster area by the IRS.

WHAT IS AN AFFECTED TAXPAYER? (Go to www.irs.gov for more details)

A taxpayer does not have to be located in a Federally Declared Disaster Area to be an “affected taxpayer.” Taxpayers are “affected” if records necessary to meet a filing or payment deadline postponed during the relief period are located in a covered disaster area.

An affected taxpayer can be:

An individual
Any business entity or sole proprietor
Any shareholder in an S Corporation

Disaster Relief can Apply if the Tax Preparer is in a Disaster Area but the Client is Not

Disaster relief applies to tax preparers who are unable to file returns or make payments on behalf of the client because of the disaster. Therefore, if you are a taxpayer outside of the disaster area, you may qualify for relief if:

your preparer is in the disaster area, and
the preparer is unable to file or pay on your behalf.

If the affected partnership or S Corp cannot provide you the records necessary to file your return, you are an affected taxpayer. Your filing and payment deadlines are postponed until the end of the postponement period just like the affected partnership or S Corp.

HAVE A PLAN BEFORE DISASTER STRIKES:

Document your valuables before the disaster occurs. Create lists, videos, or use pictures to ensure you have a complete list. IRS Publication 584 can help taxpayers compile a room-by-room list of belongings.
Your IT infrastructure systems and on-site services site will likely fail during the disaster making them unavailable. When possible, utilize online or cloud-based services to hold your data and ensure ongoing communications.
Build a plan for temporary office space or remote working solutions to aid in your recovery efforts.

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