IRS gives early Christmas gift to Katrina Victims

Sunday, October 29, 2006

IRS comissioner Mark W. Everson has ordered the Internal Revenue Service agency to delay collecting back taxes from Huricane Katrina victims until after the November 7 elections and the holiday season, mostly to avoid any negative publicity while America goes to the polls.

Everson - who has close ties to the White House - revealed in an interview that delaying the collection of taxes until after the midterm elections, along with postponing notices to people who failed to file tax returns, was an effort to avoid casting the IRS in a bad light.

The Internal Revenue Service has broad discretion to append tax filing dates in the case of disasters, and has traditionally relaxed tax collection efforts before the holiday season.

In the wake of Huricane Katrina, when hundreds of thousands of people lost everything, including their homes, incomes and tax records, the IRS delayed the filing deadline for 2005 taxes to October 16, 2006, for those living in the counties most affected by the storm. Under normal circumstances, those taxpayers who did not file returns or pay their taxes by that extended deadline would begin receiving notices and, eventually, collection demands from the Internal Revenue Service.

Mr. Everson’s order delayed those tax collection efforts until early next year.