Disaster postponements under IRC 7508A, and penalty relief when a disaster hits

How a postponement comes about

IRC 7508A(a) authorizes the IRS, for a taxpayer affected by a federally declared disaster, a significant fire, or a terroristic or military action, to specify “a period of up to 1 year that may be disregarded” in deciding whether listed acts were timely, in computing interest, penalties and additions to tax, and in determining credits and refunds. Rev. Proc. 2018-58 lists the acts that can be postponed, but it “does not, by itself, provide any postponements”; relief comes from the IRS notice or news release for each disaster.

There are three routes in 2026:

• FEMA major disaster declarations. IRM 25.16.1.4.1 says the IRS provides relief when FEMA issues a major disaster declaration listing at least one area qualifying for Individual Assistance, and generally not for Public Assistance-only declarations. Once Individual Assistance is authorized, the IRS covers all counties designated for Individual or Public Assistance.
• Mandatory 120-day extension. IRC 7508A(e) separately disregards, for qualified taxpayers in an area where the President provides assistance under section 408 of the Stafford Act, the period from the earliest incident date to 120 days after the later of that date or the declaration date.
• State-declared disasters. Under IRC 7508A(c), added by the Filing Relief for Natural Disaster Act (Public Law 119-29), the IRS may, after consulting FEMA, apply the same rules on the written request of a Governor for a qualified State declared disaster. IRM 25.16.1.2.2 lists what the Governor's request must include, and notes these disasters do not require the 120-day minimum.

The IRS publishes each grant on its tax relief in disaster situations page by state and date. In 2026, for example, the IRS announced relief for storms, wildfires and typhoons with deadlines postponed to dates such as November 2, 2026 and February 1, 2027.

Who is an affected taxpayer

IRM 25.16.1.3 (and the parallel list in IRC 7508A(e)(2)) defines the people who get relief:

• individuals whose principal residence is in the covered disaster area;
• businesses and sole proprietors whose principal place of business is in the area;
• relief workers affiliated with a recognized government or philanthropic organization assisting in the area;
• individuals and businesses outside the area whose records needed to meet a deadline in the postponement period are maintained in the area, and estates or trusts with such records there;
• the spouse of an affected taxpayer, solely regarding a joint return;
• individuals visiting the area who were killed or injured as a result of the disaster; and
• anyone else the IRS determines is affected.

The records rule matters for practitioners. IRM 20.1.2.2.2.2 extends relief to taxpayers who cannot meet a deadline “because their tax professional who maintains their books or records is located within a disaster area”, even if the client is not.

How long the postponement lasts

For major disasters with Individual Assistance, IRM 25.16.1.2.1 says the postponement lasts at least 120 days from the incident start date and cannot exceed one year, though it can be extended and runs concurrently with other relief. The period begins on the incident start date or the FEMA declaration date, whichever gives the longer relief, and never ends on a weekend or holiday. When the declaration is issued within 30 days of the incident, the IRS generally uses a fixed schedule:

If the declaration comes more than 30 days after the incident, the schedule is not used and relief ends 120 days after the declaration date under IRC 7508A(e). The IRS can extend either for severe disasters. Overlapping disaster periods for the same tax period are treated as one period from the earliest start to the latest end (IRM 20.1.2.2.2.2).

Deposits are the exception. IRM 25.16.1.4.1: “Payroll and excise tax deposits will receive a 15-day abatement period.” An employer in a covered area does not get months to catch up on federal tax deposits; see the failure-to-deposit penalty.

Which deadlines move, and which do not

The rule that surprises clients is that a postponement only helps with deadlines that fall inside the period. IRM 20.1.2.2.2.2: “In order for the period to be disregarded to impact either the penalty for filing late or the penalty for paying late, the due date for filing or paying must fall within the disaster period as determined by the Secretary.”

For payments, the change came in 2015. “For disaster periods beginning after 12/31/2014, IRS will no longer suspend accrual of the penalty for paying late for any tax due prior to the start of the disaster period.” That penalty is removed only on reasonable cause or First Time Abate. A disaster period that starts after year-end and ends on or before the return due date also does not extend the time to file and pay, unlike a combat zone period.

Recent legislation tightened notice practice. IRM 25.16.1.4.1 and 25.16.1.6 describe H.R. 1491 as requiring initial balance due notices with deadlines in a postponement period to reflect the postponed payment date, and as generally prohibiting demand for payment until after the period.

Refund claims benefit too. Under IRC 7508A(f), a disregarded filing period is treated as an extension of time to file for the IRC 6511(b)(2)(A) lookback, and IRM 25.16.1.4.2 notes H.R. 1491 extended the refund claim lookback for affected taxpayers. See refund claims for paid penalties.

Interest during the postponement

IRM 20.2.7.13.1 limits interest suspension to returns whose original due date falls within the disaster period, for disasters on or after January 1, 2015. An extended due date inside the period is not enough for interest relief, as the IRM's examples show. Pre-existing balances due before or after the period do not qualify. A taxpayer billed for interest or penalties that accrued during the postponement should contact the IRS to request abatement. More on interest provisions: interest abatement.

Clients the IRS does not flag automatically

The IRS identifies affected taxpayers by address of record and posts TC 971 with action code 086, 087 or 688 to the entity, which creates a -S or -O freeze. The -S freeze grants filing and payment relief without suspending compliance activity; the -O freeze, used only in the most catastrophic disasters, also suspends most notices and several examination and collection activities (IRM 25.16.1.7.1 and 25.16.1.7.2).

A client whose address of record is outside the area, but who qualifies (records or preparer in the area, relief worker, recently moved), has to self-identify. IRM 25.16.1.7.1 says taxpayers can call the IRS Special Services line at 866-562-5227, must give the reason they meet an affected-taxpayer definition, and “No additional proof is required.” It also states “Tax practitioners may request self-identification on behalf of affected individual and business taxpayers.” Do it before the penalties assess where possible; the IRM tells employees not to abate penalties because of a disaster unless the disaster indicator is already posted.

1. Find the IRS relief announcement for the disaster and note the covered areas, start date and postponed deadline.
2. For each client, compare original due dates and payment dates to the period: only deadlines inside it move.
3. Check the transcript for TC 971 AC 086, 087 or 688. If missing for a qualifying client, call 866-562-5227 to self-identify (with a Form 2848 or 8821 on file for the conversation).
4. For paper filings, IRM 20.2.7.13 notes that a taxpayer not systemically identified can write the name of the disaster across the top of the return.
5. After filing, confirm penalties were not assessed, or request abatement citing the disaster and the postponement.

Clients outside the covered area

A client who suffered a fire, flood or other disturbance but is not an affected taxpayer under a declaration falls back on reasonable cause. IRM 20.1.1.3.2.2.2 says relief may be requested where the event caused the failure, but that “one of these circumstances by itself does not necessarily provide penalty relief.” The factors are timing, the effect on the business, the steps taken to comply, and whether the taxpayer complied when it became possible. The event may also support other grounds: inability to obtain records, or serious illness of the responsible person. IRM 25.16.1.4.1 makes the same point for taxpayers who do not qualify for administrative disaster relief but have a disaster-related hardship. See reasonable cause, and, for clients with clean histories, First Time Abate.

Questions practitioners ask