The North Carolina Department of Revenue recognizes that recent hurricanes may have affected the ability of certain taxpayers to meet North Carolina’s filing deadlines. The Department will work with taxpayers, on a case-by-case basis, and will waive any penalties assessed against taxpayers who cannot meet state filing or payment requirements as a result of Hurricanes Harvey, Irma, and Maria and generally recognize the federal due date of January 31, 2018. Additionally, the Department is allowing an extension of 30 days for filing returns for sales and use taxes for affected taxpayers.
North Carolina law provides that the penalties for failure to obtain a license (G.S. 105-236(a)(2)), failure to file a return (G.S. 105-236(a)(3), and failure to pay tax when due (G.S. 105-236(a)(4)) (collectively, “Late Action Penalties”) may not be assessed for any period in which the time for filing a federal return or report or for payment of a federal tax is extended under section 7508A of the Internal Revenue Code because of a presidentially-declared disaster. The sales and use tax extension is allowed under State law as well (G.S.105-164.19).
The Secretary of Revenue is also authorized by statute to waive or reduce any penalties provided for in Subchapter 1 of Chapter 105. The Department’s penalty policy authorizes waiver of penalties for automatic reasons for a taxpayer that is unable to comply with the state’s tax laws because of a natural disaster. However, interest remains due on all taxes due from the original due date until the date paid.
On September 26, 2017, the Internal Revenue Service offered a summary of key tax relief available to victims of Hurricanes Harvey, Irma, and Maria (IR-2017-160). In general, the IRS is providing relief to individuals and businesses anywhere in Florida, Georgia, Puerto Rico, and the Virgin Islands, as well as parts of Texas. The federal relief gives affected taxpayers until January 31, 2018 to file certain individual and business tax returns and pay certain taxes due. The Department also recognizes that taxpayers not located in the federally-declared disaster areas may be unable to comply with the State’s requirements to timely file a tax return or timely pay tax due because the natural disaster destroyed property, critical tax records, or both.
Pursuant to the Department’s penalty policy, the waiver of Late Action Penalties will be considered a waiver for automatic reasons and will not be considered as a waiver for good compliance. Affected taxpayers may request a waiver of Late Action Penalties by either (1) submitting Form NC-5500, Request to Waive Penalties, to the Department, or (2) by writing a letter to the Department. Form NC-5500 is available by calling our toll-free taxpayer assistance line at 1-877-252-3052 or by accessing the Department's website. A taxpayer who completes Form NC-5500 must sign the form before it can be processed by the Department. A letter submitted to the Department must contain the same information that is requested on Form NC-5500. The Department can process a request submitted on Form NC-5500 faster than it can process the same request submitted in a letter.