Florida Storm Victims Get Tax and Fuel Penalty Relief

IRS extends tax deadlines and lifts dyed diesel fuel penalties for Hurricane Ian victims in Florida.

Hurricane Ian slammed into the Florida coast last week, leaving a trail of destruction that resulted in more than a million without power and 81 confirmed dead. The Internal Revenue Service announced tax relief and dyed diesel fuel penalty relief for storm victims following a disaster declaration for the entire state by the Federal Emergency Management Agency (FEMA).  

These relief measures are designed to make disaster recovery easier by delaying upcoming tax-related deadlines and helping emergency workers operate in affected areas. Tax relief is automatically granted to individual residents and business owners in affected areas; dyed diesel fuel penalty relief is available to sellers and emergency-vehicle operators who pay the highway diesel tax.  

What deadlines are affected by Hurricane Ian tax relief?

The Florida tax relief delays some individual and business deadlines beginning on September 23, 2022, until February 15, 2023. While the “Disaster Assistance and Emergency Relief for Individuals and Businesses” page on IRS.gov includes information about the affected deadlines, the agency listed the following affected deadlines in its news release:

  • October 17, 2022, individual extension filing deadline (does not apply to tax payments due April 18, 2022)
  • October 17, 2022, calendar-year corporation extension filing deadline
  • October 31, 2022, quarterly payroll and excise tax return deadline
  • November 15, 2022, calendar-year tax-exempt organization extension filing deadline
  • January 17, 2023, quarterly estimated income tax payment deadline
  • January 31, 2023, quarterly payroll and excise tax return deadline

Further, the IRS says that “penalties on payroll and excise tax deposits due on or after September 23, 2022, and before October 10, 2022, will be abated as long as the deposits are made by October 10, 2022.”

While these new deadlines are automatically granted to those with “an IRS address of record located in the disaster area,” some individuals who live out of state may be able to qualify, like relief workers. They will need to call the IRS number used for disaster-related assistance: 866-562-5227.

How does the dyed diesel fuel penalty relief work?

Dyed diesel fuel is typically only approved for usage that is exempt from excise tax, like off-road farm vehicles and heating homes. To help emergency workers responding to the situation in Florida, the IRS lifted the penalty for fuel sellers and highway emergency vehicle operators.

In a Friday news release, the agency outlined specifics of this relief:

  • This relief begins on September 28, 2022, and will remain in effect through October 19, 2022
  • The relief is available only if the operator or the person selling such fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use
  • The IRS will not impose penalties for failure to make semimonthly deposits of tax for dyed diesel fuel sold for use or used in an emergency vehicle on the highway in the state of Florida during the relief period

For more information about tax reporting and payment, see “Publication 510, Excise Taxes.”

Sources: “Hurricane Ian updates: Florida death toll climbs,” ABCNews.go.com; “Ian recovery efforts in the Southeast will be complicated: Live updates,” NPR.org; IR-2022-168; IR-2022-169

Article provided by Taxing Subjects.

Multi-Factor Authentication Can Head Off Sophisticated Scammers

Identity theft. Just the mere mention of this mayhem masquerade is enough to make the blood of tax professionals everywhere run cold.

As keepers of our clients’ most precious information, we are at once the target to identity thieves, and the solution for our customers’ protection.

Sometimes it seems as if the scammers are winning. But we already have the tools that can help keep the bad guys at bay.

Identity theft is evolving (again)

Historically, most identity theft attacks are phishing emails, though scammers have begun using text messages. Whatever form these scams take, the Internal Revenue Service says they share a few characteristics:

  • They appear to come from a known or trusted source, such as a colleague, bank, credit card company, cloud storage provider, tax software provider or even the IRS and other government agencies.
  • They create a false narrative, often with an urgent tone, to trick the receiver into opening a link or attachment.

If successful, the “link” could install malware in the background, unknown to the personnel on the receiving end. Many times, a nasty “remote access trojan” (or RAT), is installed, allowing attackers to return to the system and gain ongoing access.

This software can take over a tax pro’s office system, identifying and completing pending tax returns, then e-filing them after changing the banking information to steal the refund.

Similar scenarios can be used to employ ransomware that holds an office’s data hostage until a ransom is paid.

Use multi-factor authentication to protect your accounts

Even the safest platforms can put data at risk when used improperly, and identity thieves are adaptable. Lately, the IRS has seen evidence that cloud-computing systems are being targeted by identity thieves. These breaches are often suffered by smaller tax offices that don’t take advantage of security measures like multi-factor authentication.

Multi-factor authentication requires additional user-provided information to access an account, like a remotely generated code or answers to questions. This additional layer of security can stymie identity thieves attempting to log in fraudulently as office employees.

The Security Summit, a panel of IRS officials, state and local taxing agency representatives, and tax industry partners, has some recommendations about how multi-factor authentication should be constructed to be most effective.

First, whenever two-factor (2FA) or multi-factor (MFA) options are offered by storage providers or other cloud providers, use it. Either option could protect client accounts – even in the event that passwords become compromised.

Second, never use email as one of the additional methods of validating the user. Email is less secure and can be an easier nut to crack for the attacking identity thief. Text, phone calls or tokens are all a better choice.

Other good practices to follow include using encryption on critical drives and backing up files regularly. Don’t forget to update your anti-virus software on a regular basis.

As tax professionals, it’s up to us to secure our systems to protect the sensitive customer data.

For more information on protecting your office from scammers and identity thieves, see Publication 4557, Safeguarding Taxpayer Data and Small Business Information Security: The Fundamentals.

Other resources include Publication 5293, Data Security Resource Guide for Tax Professionals and the Identity Theft Central webpages on the IRS website.

Source: Security Summit warns tax pros of evolving email and cloud-based schemes to steal taxpayer data


Article provided by Taxing Subjects.