SECTION 9. DRAFTING

INFORMATION

The principal author of this Notice is Cliff Gannett of Tax Exempt Bonds Outreach, Planning and Review of the Office of the Director, Tax Exempt Bonds, Tax Exempt/ Government Entities. For further information regarding this Notice, contact Mr. Gannett at (202) 283-2999 (not a toll-free call).

Disaster Relief for Taxpayers Affected by the September 11, 2001 Terrorist Attack.

Notice 2001–61

PURPOSE

This notice provides tax relief under sections 6081, 6161, and 7508A of the Internal Revenue Code for taxpayers affected by the September 11, 2001, terrorist attack, which included the destruction of the two World Trade Center towers and other buildings in the World Trade Center complex, damage to the Pentagon, and the airplane crash in Pennsylvania on Tuesday, September 11, 2001. The President issued federal disaster declarations on September 11 and 13, 2001. The September 11, 2001, declaration covers five New York counties: Bronx, Kings, New York (boroughs of Brooklyn and Manhattan), Queens, and Richmond. The September 13, 2001, declaration covers Arlington County in Virginia, where the Pentagon is located. These counties constitute a “covered disaster area” within the meaning of sec

2001–40 I.R.B. 305 October 1, 2001

tion 301.7508A–1(d)(2) of the Procedure and Administration Regulations. In addition, the Internal Revenue Service has determined that other taxpayers affected (as defined below) by the terrorist attack are also entitled to relief, regardless of where they reside.

Taxpayers who believe they are entitled to relief under this notice should mark “September 11, 2001 Terrorist Attack” in red ink on the top of their return and other documents submitted to the IRS.

BACKGROUND

Section 6081 provides that the Secretary may grant a reasonable extension of time (generally not to exceed 6 months) for filing any return, declaration, statement, or other document required by the Internal Revenue Code or by regulations thereunder.

Section 6161 provides that the Secretary may grant a reasonable extension of time (generally not to exceed 6 months) for paying the amount (or any installments) of tax shown or required to be shown on any return or declaration required by the Code or by regulations thereunder.

Section 7508A provides the Secretary with authority to postpone the time for performing certain acts under the internal revenue laws for a taxpayer affected by a Presidentially declared disaster as defined in section 1033(h)(3). Pursuant to section 7508A(a) and section 301.7508A–1 of the regulations, a period of up to 120 days may be disregarded in determining whether the performance of certain acts is timely under the internal revenue laws. Section 301.7508A–1(c)(1) lists seven acts performed by taxpayers for which section 7508A relief may apply. Among these acts are the filing of certain tax returns; the payment of certain taxes; the making of deductible contributions to certain retirement plans and individual retirement arrangements; the filing of a Tax Court petition; the filing of a claim for credit or refund of tax; and the bringing of a lawsuit upon a claim for credit or refund of tax.

Section 301.7508A–1(d)(1) describes the seven types of “affected taxpayers” eligible for the 120 day postponement. These taxpayers include any individual whose principal residence, and any business entity whose principal place of business, is located in the covered disaster area; any individual who is a relief worker affiliated with

a recognized government or philanthropic organization and who is assisting in the covered disaster area; any individual whose principal residence, and any business entity whose principal place of business, is not located in the covered disaster area, but whose records necessary to meet a filing or paying deadline are maintained in the covered disaster area; any estate or trust that has tax records necessary to meet a filing or paying deadline in a covered disaster area; and any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife. Therefore, taxpayers located outside of the covered disaster area may qualify for relief if they are covered by one of the above mentioned categories.

Additionally, under section 301.7508A –1(d)(1)(vii) of the regulations, the Internal Revenue Service may determine that any other person is affected by a Presidentially declared disaster. Accordingly, the Internal Revenue Service has determined that the following persons are also affected by the disaster: (1) victims of the crash (including those on the plane and those on the ground) of the four commercial jet airplanes hijacked on September 11, 2001; (2) all workers assisting in the relief activities in the covered disaster areas and in Pennsylvania, regardless of whether they are affiliated with recognized government or philanthropic organizations; and (3) taxpayers whose place of employment is located within the Presidentially declared disaster area. In addition, taxpayers who have difficulty in meeting their federal tax obligations because of disruptions in the transportation and delivery of documents by mail or private delivery services resulting from the terrorist attack, and who do not otherwise qualify under section 7508A, are affected taxpayers only for purposes of relief as described in (5) of the Grant of Relief section below. The perpetrators of the attack, and anyone aiding the attack, will not qualify for relief under this notice.

GRANT OF RELIEF

(1) Individuals located in the affected counties and other individuals who are “affected taxpayers” as defined by section 301.7508A–1(d)(1) of the regulations and by this notice that have extended the time for filing their tax year 2000 federal individual income tax return beyond September 10, 2001, will have a postponement to February 12, 2002, to file their returns. A simi

lar postponement to pay the amount of tax (or any installment of tax) shown or required to be shown on those returns is generally not permitted. This is because the tax was originally due on the due date of the 2000 return, April 16, 2001, and, generally an extension of time to pay is not granted; however, a period of 120 days from September 11, 2001, until January 9, 2002, will be disregarded in the calculation of any failure to pay penalty. Thus, the penalty for failure to pay the tax due would start accruing once again if the tax is not paid by January 9, 2002. These returns include individual income tax returns (Forms 1040, 1040A, 1040EZ, 1040NR, or 1040NR-EZ) and gift tax returns (Forms 709 and 709-A). See section 301.7508A–1(c)(1) for a list of affected returns.

(2) Affected taxpayers as defined by section 301.7508A–1(d)(1) of the regulations other than individuals are granted both a 120 day postponement under section 7508A and a six month extension under sections 6081 and 6161 to file certain federal tax returns otherwise originally due on or after September 11, 2001, and on or before November 30, 2001, and to pay the tax shown or required to be shown on those returns. The 120 day postponement and the six-month extension run consecutively. In addition, affected calendar year corporations and other entities that are currently on a sixmonth extension of time to file their federal tax return that expires between September 11, 2001, and November 30, 2001, will have an additional 120 days to file their returns under section 7508A. Thus, the tax year 2000 return for an affected calendar year corporation that has been extended to September 17, 2001 (September 15, 2001, is a Saturday), will now be due by January 15, 2002. A similar postponement to pay the amount of tax (or any installment of tax) shown or required to be shown on those returns is generally not permitted. This is because the tax was originally due on the due date of the 2000 return, March 15, 2001, for a calendar year corporation and generally, an extension of time to pay is not granted. A period of 120 days from September 11, 2001, until January 9, 2002, will be disregarded in the calculation of any failure to pay penalty. Thus, the penalty for failure to pay the tax due would start accruing once again if the tax was not paid by Jan

October 1, 2001 306 2001–40 I.R.B.

uary 9, 2002. These returns include partnership returns, corporate income tax returns, estate and trust income tax returns, estate tax returns, annual returns filed by tax-exempt organizations, certain excise tax returns and employment tax returns. See section 301.7508A–1(c)(1) for a list of affected returns.

(3) The due date of any estimated tax payment for tax year 2001 originally due on or after September 11, 2001, and before January 15, 2002, for taxpayers located in the affected counties, and other affected taxpayers, is postponed under section 7508A until January 15, 2002. This applies to estimated tax payments made by individuals, corporations, estates, and trusts. Thus, for individuals, the third estimated tax payment for tax year 2001, due on September 17, 2001, is postponed until January 15, 2002. For a calendar year corporation, the third estimated tax payment for tax year 2001, due on October 1, 2001, is postponed until January 15, 2002. Affected taxpayers will not be subject to penalties for failure to pay estimated tax installments for tax year 2001 with respect to installments that were originally due on or after September 11, 2001, and before January 15, 2002, as long as such installments are paid by January 15, 2002. (4) In addition, the Internal Revenue Service has granted a 120 day postponement of time to the affected taxpayers to perform the other acts described in section 301.7508A–1(c)(1) of the regulations. The postponement applies to acts required to be performed within the period beginning on September 11, 2001, and ending on November 30, 2001.

(5) Taxpayers who have difficulty in meeting their federal tax obligations because of disruption in the transportation and delivery of documents by mail or private delivery services resulting from the terrorist attack, and who do not otherwise qualify for relief as described above, will have until November 15, 2001, to file returns and make payments required to be made from September 11, 2001, through October 31, 2001.

(6) As a result of the terrorist attack, taxpayers may have difficulty in making timely federal tax deposits in accordance with section 6302 and the regulations thereunder. The time for making federal tax deposits, however, cannot be extended under section 6081 or postponed under

section 7508A. For deposits required to be made from September 11, 2001, through October 31, 2001, however, the Internal Revenue Service will waive the addition to tax under section 6656 for the failure to timely make any deposit of tax if the deposit is made on or before November 15, 2001, because reasonable cause for the failure exists during this period. The relief from the failure to timely deposit addition to tax under this paragraph is only applicable to taxpayers who are unable to meet their deposit obligations because their (or their service provider’s) records, computers, or other essential supporting services were damaged, or essential personnel were injured, by the attack.

DRAFTING INFORMATION

The principal author of this notice is Charles Hall of the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division). For further information regarding this notice, you may call (202) 622-4940 (not a toll-free call).

Designated Private Delivery Services

Notice 2001–62

This notice updates the list of designated private delivery services (“designated PDSs”) set forth in Notice 99–41 (1999–2 C.B. 325) for purposes of the timely mailing treated as timely filing/paying rule of section 7502 of the Internal Revenue Code, effective September 1, 2001. The Internal Revenue Service (IRS) is adding two new delivery services to the list of designated PDSs. Also, this notice modifies Rev. Proc. 97–19 (1997–1 C.B. 644) to provide a new address for a PDS to submit its written application for designation. This new address will also be used to request administrative review of a letter of denial of designation, appeal a letter confirming the denial of designation, provide written notification of any change in application information, and appeal a proposed revocation letter.

Section 7502(f) authorizes the Secretary to designate certain PDSs for the timely mailing treated as timely filing/paying rule of section 7502. Rev. Proc. 97–19 provides the criteria currently applicable for designa

tion of a PDS. Notice 97–26 (1997–1 C.B. 413) provides special rules to determine the date that will be treated as the postmark date for purposes of section 7502. Notice 97–50 (1997–2 C.B. 305) modifying Rev. Proc. 97–19 and Notice 97–26, provides that each year there will be only one application period to apply for designation, which will end on June 30th. Notice 99–41 provides that the IRS will publish a subsequent notice providing a new list of designated PDSs only if a designated PDS (or service) is added to, or removed from, the current list.

Effective September 1, 2001, the list of designated PDSs is as follows:

1. Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service;
2. DHL Worldwide Express (DHL): DHL “Same Day” Service and DHL USA Overnight;
3. Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2 Day; and
4. United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express. UPS Worldwide Express Plus and UPS Worldwide Express are added to the list published in Notice 99–41. Both of these services provide delivery services to the United States from foreign countries. Airborne, DHL, FedEx, and UPS are not designated with respect to any type of delivery service not identified above. The list of designated PDSs and services set forth above will remain in effect until further notice. The IRS will publish a subsequent notice setting forth a new list only if a designated PDS (or service) is added to, or removed from, the current list, or if there is a change to the application and/or appeal procedures. Delivery services that wish to be designated in time for an upcoming filing season must continue to submit applications by June 30th of the year preceding that filing season, as required by Rev. Proc. 97–19 (as modified by Notice 97–50). Notice 97–26 continues to provide special rules used to determine the date that will be treated as the postmark date for purposes of section 7502.

As a result of the IRS’s reorganization, the application addresses listed in section

2001–40 I.R.B. 307 October 1, 2001

6 of Rev. Proc. 97–19 are no longer correct. Section 6 of Rev. Proc. 97–19 is modified to provide that a PDS may now submit its written application by mailing it to:

Internal Revenue Service Attn: Director, Submission Processing

W:CAS:SP New Carrollton Federal Building 5000 Ellin Road Lanham, MD 20706

Applications will no longer be accepted by hand delivery at the Courier’s Desk located at 1111 Constitution Avenue, N.W. The above address is also where a PDS may write to: (1) obtain administrative review of a letter of denial of designation under section 9.03 of Rev. Proc. 97–19; (2) appeal a letter confirming the denial of designation under section 9.06 of Rev. Proc. 97–19; (3) provide prompt written notification to the IRS of any change in application information under section 10.01 of Rev. Proc. 97–19; and (4) appeal the issuance of a proposed revocation letter under section 12.03 of Rev. Proc. 97–19.

EFFECT ON OTHER DOCUMENTS

Revenue Procedure 97–19 is modified. Notice 99–41 is modified and, as so modified, is superseded.

EFFECTIVE DATE

This notice is effective on September 1, 2001.

FOR FURTHER INFORMATION

The principal author of this notice is Charles A. Hall of the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division). For further information regarding this notice, contact Charles A. Hall at (202) 622-4940 (not a toll-free call).

Additional Disaster Relief for Taxpayers on Account of the September 11, 2001, Terrorist Attack

Notice 2001–63

The Treasury Department and the Internal Revenue Service recognize that the continuing disruption to the nation’s financial

markets, transportation system, and telecommunication and computer networks, and continuing security concerns have made it difficult for many taxpayers to meet their September 17, 2001, filing and payment requirements, and for their representatives to assist them in doing so. This notice provides additional tax relief under sections 6081, 6161, and 7508A for taxpayers who, regardless of their location, are continuing to experience difficulties in meeting their filing and tax payment requirements on account of events related to the September 11, 2001, terrorist attack. The Internal Revenue Service has determined that the due date for all federal tax obligations falling between September 10, 2001, and September 24, 2001, is postponed to September 24, 2001. This postponement of time covers the filing of returns and claims for refund, the payment of tax (including estimated tax payments), making elections, and filing any other federal tax documents. The postponement does not apply to deposits of federal taxes. For relief with respect to deposits of federal taxes, see Notice 2001–61 on page 305 of this Bulletin and IRS News Release IR-2001–79.

The relief provided by this notice is in addition to the relief provided in Notice 2001–61 and IRS News Release IR-2001–79.

DRAFTING INFORMATION

The principal author of this notice is Charles Hall of the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division). For further information regarding this notice, you may call (202) 622-4940 (not a toll-free call).

26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability.

Rev. Proc. 2001–48