IRS grants relief for impact of Hamas attacks

By Investor Empires On Nov 14, 2024

The US Internal Revenue Service (IRS) recently issued a notice providing tax relief for individuals and businesses affected by Hamas attacks in Israel beginning October 7, 2023, applicable to residents and businesses located in Israel, the West Bank, and Israel. Gaza.

This relief provides an extended time frame to satisfy certain tax filing and payment obligations through September 30, 2025.

The exemption specifically covers different types of tax liabilities, including income tax, estate tax, gift tax, employment tax, and certain other federal tax liabilities.

Who is eligible for relief?

Taxpayers eligible for these extensions include:

Individuals who primarily reside in Israel, Gaza, or the West Bank.

Individuals visiting these areas have been killed, injured, or taken hostage as a result of the attacks. –

Companies or individual institutions with a main place of business in those areas.

Individuals affiliated with government-affiliated organizations or charitable organizations that assist affected areas.

Individuals, corporations, sole proprietors, estates or trusts whose tax preparers or tax records are located in these areas.

Couples apply jointly with any of the eligible individuals listed above.

What is relief?

The exemption allows eligible taxpayers to defer until September 20, 2025:

File returns for income, estate, gift, employment, excise (other than firearms) taxes, and certain other taxes. –

Pay income, estate, gift, employment, excise (other than firearms) taxes, and certain other taxes.

File lawsuits for taxes assessed by the IRS or to recover taxes paid to the IRS.

Exceptions and Additional Considerations

It is important to note that this exemption only applies to taxpayers affected by attacks attributed to Hamas on October 7, 2023. Individuals affected by other regional hostilities, such as Hezbollah attacks in northern Israel, Houthi attacks in central Israel, or other attacks originating in Yemen. Syria, Iraq, and Iran after October 7, 2023, are not covered by the IRS subsidy.

However, taxpayers affected by these other attacks can argue to the IRS that they stem from the October 7, 2023 Hamas attacks and are therefore entitled to similar relief. We recommend consulting with a tax professional before filing such claims.

Implications for US and non-US citizens

This relief is not limited to US citizens or green card holders. Any eligible person or entity with a tax obligation to the IRS who maintains a residence or business in the Designated Areas may benefit from this measure, regardless of his or her citizenship status or any tax treaties between the United States and Israel.

This IRS relief demonstrates support for those affected by violence in Israel, providing flexibility in tax compliance for affected individuals and entities so that they are better positioned to meet their tax and payment obligations.

Brian C. Bernhardt and Sarah B. Besser of Fox Rothschild Law Firm in the US represents Israeli companies and individuals.

Published by Globes, Israel Business News – en.globes.co.il – on November 13, 2024.