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June 25, 2021

IRS finalizes regulations on mandatory 60-day postponement of certain tax-related deadlines due to federally declared disaster

The IRS has issued final regulations (TD 9950) addressing the mandatory 60-day extension, under new IRC Section 7508A(d), of certain time-sensitive tax deadlines due to a presidentially declared disaster area, military action, or act of terrorism. The regulations also clarify the definition of a federally declared disaster area under IRC Section 165. The applicability date for the IRC Section 7508A(d) regulations is December 21, 2019; the IRC Section 165 regulations apply as of June 11, 2021.


IRC Section 7508A(a) allows the Secretary to use discretion to postpone certain tax-related deadlines for up to one year due to a federally declared disaster. IRC Section 165(i)(5) defines a federally declared disaster as "any disaster subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act" (the Stafford Act).

IRC Section 7508A(d), added by the Taxpayer Certainty and Disaster Tax Relief Act of 2019, created a mandatory 60-day postponement period, commencing on the earliest incident date and ending 60 days after the latest incident date, for tax-related deadlines under IRC Section 7508A. The mandatory 60-day postponement period runs concurrently with the postponement period determined by the Secretary under IRC Section 7508A(a) if that period equals or exceeds 60 days. If that period is less than 60 days, the mandatory 60-day postponement period would run concurrently for that time and then continue running in addition to the Secretary's postponement period. Examples provided in the final regulations clarify and illustrate these timelines.

Proposed regulations addressed ambiguities

The proposed regulations addressed three areas of ambiguity:

  1. What time-sensitive acts are to be postponed
  2. How the mandatory 60-day postponement period is to be calculated when the declaration specified in IRC Section 7508A(d) does not contain an incident date
  3. Whether a "federally declared disaster" included emergencies under the Stafford Act as well as major disasters

Time-sensitive acts: The proposed regulations provided that any time-sensitive acts postponed under IRC Section 7508A(d) are to be specified by the Secretary at her discretion under IRC Section 7508A(a). Accordingly, if the Secretary determines not to postpone a time-sensitive act under her discretionary authority under IRC Section 7508A(a), that act will also not be postponed under IRC Section 7508A(d).

Calculation of postponement period: The proposed regulations also clarified that the mandatory postponement period cannot exceed the one-year period authorized under IRC Section 7508A(a). If the federally declared disaster does not have an incident date, there is no mandatory period for relief under IRC Section 7508A(d).

Definition of federally declared disaster: The term "federally declared disaster" includes both a major disaster declared under section 401 of the Stafford Act and an emergency declared under section 501 of the Stafford Act.

Final regulations

The IRS received five sets of comments on the underlying proposed regulations. After considering the comments, the IRS rejected, as unnecessary or beyond the scope of the regulations project, most of the modifications that commenters suggested.

One commenter expressed concern that, by tying the postponed time-sensitive acts under IRC Section 7508A(d) to time-sensitive acts chosen at the Secretary's discretion under IRC Section 7508A(a), it allowed for the possibility that no acts would be postponed as part of the mandatory 60-day postponement period, rendering it "a nullity." The IRS rejected this argument, noting that the cross-reference to Section 7508A(a) "operates to require the same determination by the Secretary as a prerequisite to determining the acts to which the mandatory 60-day postponement period applies."

The IRS agreed that changes were needed in Example 3 in Prop. Reg. Section 301.7508A-1(g)(4)(iii) to better illustrate how the mandatory 60-day postponement period is calculated if multiple disaster declarations are made. The facts in Example 3 depict a county with ongoing wildfires in which FEMA has announced an emergency declaration approved by the President, specifying an "earliest incident date" but "no latest incident date." In the preamble to the final regulations, the IRS clarifies that Example 3 "is intended to illustrate the calculation of the mandatory 60-day postponement period in the event of an ongoing disaster with multiple declarations and shifting 'latest' incident dates."

The final regulations affect: individuals who reside in or are affected by a disaster area; businesses with a principal place of business in a disaster area (including tax-exempt organizations); relief workers who provide assistance in a disaster area; and taxpayers whose tax records necessary to meet a tax deadline are located in a disaster area. The final regulations apply to disasters declared on or after December 21, 2019, the date of enactment of IRC Section 7508A(d).


In addressing the taxpayer comments on the proposed regulations, the IRS opted to exercise the significant flexibility and discretion granted to it under IRC Section 7508A(a). Specifically, the IRS declined to establish a bright-line rule in the context of multiple disaster declarations; while such a rule could be more predictable, it noted, the statute as written was capable of being applied in a clear manner without the adoption of interpretative regulations. The IRS's choice to balance its ability to provide relief throughout a disaster against the public's interest in clearly defined rules conforms with the agency's desire to remain as operationally flexible as possible in the wake of a disaster. Similarly, by dismissing the "nullity" argument, the IRS appears to implicitly acknowledge that some form of relief will always be provided under IRC Section 7508A(d) in the event of a disaster declaration.

Tax-exempt organizations that are affected by and/or located within a federally declared disaster area should pay close attention to any news releases or updates from the IRS, as these final regulations allow the relief provided to vary from one disaster to another. Affected organizations should also pay close attention to any updates from FEMA, as any changes to the incident date may result in an extension of the mandatory postponement period.

In response to the ongoing global pandemic, the IRS has outlined relief based on locality here.

Please contact your EO professional for further information.



— For more information about EY's Exempt Organization Tax Services group, visit us here.


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