SECTION 1. PURPOSE

This notice provides guidance on the federal income and employment tax treatment of special allowances (as defined in 5 C.F.R. §§ 550.403(c) and 550.405(b)(2)) paid by federal executive agencies (as defined in 5 U.S.C. § 105) to employees (as defined in 5 C.F.R. § 550.401(b)(2), (3), and (4)) to reimburse certain expenses the employees and their dependents incur while evacuating from the Hurricane Katrina core disaster area and staying at a safe haven as a result of the extraordinary damage and destruction caused by Hurricane Katrina. The term “Hurricane

Katrina core disaster area” means that portion of the Hurricane Katrina Disaster Area determined by the President to warrant individual or individual and public assistance from the federal government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. See § 2(2) of the Katrina Emergency Tax Relief Act of 2005, Pub. L. No. 109–73, 119 Stat. 2016 (2005).