Permanent Tax Relief Provisions for Disaster Victims as Presented in the Internal Revenue Code [Updated March 3, 2008]   [open pdf - 94KB]

"When natural or man-made disasters occur, there are several tax relief provisions that apply to affected taxpayers. This report focuses on permanent tax relief laws that are intended to benefit victims of both presidentially and nonpresidentially declared disasters such as hurricanes, floods, earthquakes, tornadoes, droughts, wildfires, wars, and terrorist attacks. The selected laws are summarized in table format and are arranged by different categories, including 'losses,' 'gains exempted from income,' and 'postponements.' For each law summarized, the table contains the corresponding Internal Revenue Code (IRC) section citation and a brief description of the provision. The descriptions are combinations of verbatim and summarized IRC text. Several bills introduced in the 110th Congress propose to create permanent tax relief provisions for disaster victims. The Catastrophe Savings Account Act of 2007 (H.R. 1787 and S. 927) would provide for tax-exempt catastrophe savings accounts (CSAs) and would allow tax-free distributions from these accounts to pay expenses resulting from presidentially declared disasters. The Hurricane and Tornado Mitigation Investment Act of 2007 (S. 930 and H.R. 913) would allow individual and business taxpayers a tax credit for 25%of their qualified hurricane and tornado mitigation property expenditures up to $5,000 for any taxable year. The Fallen Heroes Tax Fairness Act of 2007 (H.R. 116) would extend the provisions exempting deceased members of the Armed Forces who die from wounds, disease, or injury incurred while serving in a combat zone to the last taxable year ending before such wounds, disease, or injury were incurred."

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CRS Report for Congress, RL33642
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