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Tax Planning, Tax Requirements, Tax Updates

IRS Issues Notice Extending Tax Filing & Payment Deadline for California Storm Victims

Some relief from the Cal­i­for­nia storms

Due to the intense storms hit­ting Cal­i­for­nia in late 2022 and ear­ly 2023, the IRS announced in Feb­ru­ary this year a sig­nif­i­cant exten­sion of the dead­lines for fil­ing and pay­ment of var­i­ous tax­es until Octo­ber 16, 2023. This exten­sion applied to all Cal­i­for­ni­ans, with the excep­tion of those resid­ing in Lassen, Mod­oc, and Shas­ta coun­ties.

The state of Cal­i­for­nia fol­lowed suit, pro­vid­ing sim­i­lar exten­sions. Con­se­quent­ly, a major­i­ty of tax­pay­ers in Cal­i­for­nia were giv­en extra time to file and set­tle their 2022 income tax­es, 2022 gift tax­es, estate tax returns due with­in 2023, and esti­mat­ed income tax pay­ments for 2023. Exten­sions were also grant­ed for cer­tain crit­i­cal tax-relat­ed activ­i­ties, includ­ing the 45- and 180-day peri­ods for Sec­tion 1031 exchanges.

Numer­ous Cal­i­forn­ian tax­pay­ers, plan­ning ahead, set the pay­ment of their 2022 income tax­es and esti­mat­ed tax­es for 2023 for Octo­ber 16, ensur­ing their punc­tu­al­i­ty. The IRS processed these planned tax pay­ments on the morn­ing of Octo­ber 16.

How­ev­er, an unex­pect­ed turn came lat­er that day when the IRS released Notice 2023-189, which pushed the tax fil­ing and pay­ment dead­lines from Octo­ber 16 to Novem­ber 16, 2023. Cal­i­for­nia prompt­ly mir­rored this addi­tion­al exten­sion. More­over, dead­lines for spe­cif­ic urgent tax pro­ce­dures, encom­pass­ing those for Sec­tion 1031 exchanges, received exten­sions as well.

It’s also cru­cial to rec­og­nize that the IRS exten­sions are designed to oper­ate in par­al­lel with any oth­er exten­sions tax­pay­ers might have already secured. For instance, if some­one passed away on Sep­tem­ber 17, 2022, the orig­i­nal due date for the estate tax return would be nine months from that time, falling on June 17, 2023.

How­ev­er, with the recent exten­sions, this dead­line shifts to Novem­ber 16, 2023. Should the execu­tor opt for the stan­dard six-month fil­ing exten­sion, this would be cal­cu­lat­ed from the ini­tial June 17 dead­line, mean­ing the extend­ed dead­line can only stretch to Decem­ber 17, 2023, not six months from Novem­ber 16.