Filing Deadlines Extended for Flood Victims

The Internal Revenue Service has granted relief to taxpayers in the designated disaster area of the southeastern United States who are unable to meet their federal tax obligations because of the recent flooding. Today's release extends the time for filing with respect to pension and other employee benefit plans to October 17, 1994. The U.S. Department of Labor's Pension and Welfare Benefits Administration also has jurisdiction in employee benefit matters and has joined with the Service in providing the relief described in this news release.

The extension applies to plans located in a county designated by the Federal Emergency Management Agency as a Federal disaster area as a result of the flooding, as well as in cases where plan administrators are unable to obtain the information necessary for filing from service providers, banks, or insurance companies who operations were directly affected by the flooding.

In addition, the extension applies to banks and insurance companies affected by the flooding which are required in certain instances to file reports with the Department of Labor.

The following rules apply in the case of pension and employee benefit plan returns and related excise taxes required to be filed or paid on or after July 1, 1994. The Agencies will consider filers affected by the disaster as having reasonable cause for late filing and/or payment will therefore not impose any late filing or late payment penalties if the relevant return if filed or tax paid by October 17, 1994.

Thus, for example, information returns, such as the Form 5500 series of returns, and excise tax returns, such as for reporting and paying a tax on prohibited transactions or reversion of plan assets to the employer, which are due within the specified time period will not be assessed the late filing or late penalties if the returns are filed and the taxes paid by October 17, 1994.

To qualify for the extension, returns and reports must be marked in red, bold print "Flood '94" on the top center of the first page of the return or document. The report of an employee benefit plan not located within the designated disaster area must also include, as an attachment to the report, the county in which the service provider is located.

However, taxpayers should be aware that statutory deadlines cannot be administratively extended by the Service. Under section 404(a)(6) of the Code, amounts contributed to qualified benefit plans may be deducted on the return for the prior year only if the contribution is made by the due date (with extensions) of that return. Also, certain contributions are required to be made to pension plans by specified dates under section 412 of the Code. Similarly, if a distribution from a plan is to be rolled over to a qualified plan or Individual Retirement Account and not included in income, that rollover is statutorily required to be made within 60 days of receipt of the distribution. Taxpayers are advised that they must make these contributions or payments by the statutory deadlines.

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