Murphy Bill to Improve Tax Filing for Disaster Victims Passes Ways and Means Committee

Washington, D.C. — Congressman Greg Murphy, M.D. applauds the passage of his legislation, H.R. 1491, the Disaster Related Extension of Deadlines Act by the House Ways and Means Committee with bipartisan support. This bill enacts much-needed reforms to ensure disaster victims are eligible for tax refunds and credits for three years after a postponed filed deadline. Additionally, the bill extends the deadline for demanding payments when the IRS postpones a payment deadline.

"Disaster victims face unbelievable hardship while restoring their lives after a tragedy," said Congressman Greg Murphy, M.D. "The last thing folks who have had their lives upended by an emergency need to deal with is jumping through confusing hoops imposed by the IRS. The Disaster Related Extension of Deadlines Act ensures individuals have ample time to receive a tax refund or credit and the IRS communicates effectively to filers to prevent unintended delinquency on accrued interest or penalties. I am grateful for the bipartisan support from my colleagues in the House Ways and Means Committee and look forward to advocating for the passage of this bill on the House floor."

"Currently, taxpayers who receive an extension have extra time to claim tax credits and refunds, but those whose filing deadlines were postponed due to a disaster do not receive the same consideration," said Congressman Jimmy Panetta. "Our bipartisan Disaster Related Extension of Deadlines Act ensures that families and small businesses recovering from disasters have the additional time they need to claim this financial relief.  This commonsense fix will help communities in California’s 19th Congressional District and across the country as they rebuild from severe weather events."

"When the IRS postpones a filing or payment deadline due to a natural disaster, taxpayers need to be treated just as fairly as those who have separately requested their own extensions in filing," said Ways and Means Committee Chairman Jason Smith. "This legislation ensures victims of natural disasters whose tax deadlines are postponed receive the same additional flexibility throughout the filing process provided to taxpayers who request filing extensions on their own. I want to thank Representative Murphy for his leadership in advancing this important legislation and for advocating for the taxpayers in North Carolina to create a level playing field for all taxpayers, especially those who have been impacted by natural disasters."

Background 
Under current law, taxpayers are afforded a “lookback period” of up to three years to claim credits or refunds. Unfortunately, the lookback period does not take into account filers who may have postponed their filing due to a disaster declaration. This bill ensures that victims of disasters have additional time to claim any missed credits or refunds.

Separately, the IRS issues a "notice and demand" to inform filers of any payments they may owe by the original deadline but wait until the postponed deadline to make a payment. This creates unnecessary confusion and stress for disaster victims.

This legislation requires the IRS to extend the claim deadline and postponed filing deadline together, as well as tie the deadline for mailing a "notice and demand" to the postponed filing deadline for those who filed prior to the postponed deadline.