[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[Senate]
[Pages S3215-S3216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself, Mr. Daschle, Mr. Johnson, and Mr. 
        Wellstone):
  S. 585. A bill to amend the Internal Revenue Code of 1986 to 
authorize the Secretary of the Treasury to abate the accrual of 
interest on income tax underpayments by taxpayers located in 
Presidentially declared disaster areas if the Secretary extends the 
time for filing returns and payment of tax for such returns; to the 
Committee on Finance.


                     income tax relief legislation

  Mr. DORGAN. Mr. President, today I'm joined by Senators Daschle,

[[Page S3216]]

Wellstone, and Johnson in introducing legislation to provide much-
needed income tax relief for North and South Dakotans and others 
pummeled by the severe blizzards and flooding this spring in the Upper 
Midwest. This legislation builds upon the good work started by the 
Internal Revenue Service [IRS] last week.
  About a week ago, the Internal Revenue Service announced that 
taxpayers living in counties recently declared a disaster area by the 
President will be able to delay filing their Federal income tax returns 
until May 30, 1997, without facing a late filing or payment penalty. 
Clearly this is significant relief for those who may be prevented from 
filing their tax returns by the April 15, 1997 due date because of the 
recent blizzard and flooding in our part of the country.
  In its announcement, however, the IRS stated that it did not have the 
authority to waive any interest charges accruing on delayed payments 
made between April 15, 1997 and May 30, 1997. It makes no sense to 
impose interest charges for payments occurring after the original due 
date, when the IRS itself says--and I think properly so--that it will 
extend the time for filing income tax returns and payments by taxpayers 
located in a Presidentially-declared disaster area. In my opinion, the 
IRS's action properly suggests that income tax return filing and 
payments made before the new date should not be treated as late. It is 
just that simple, and our legislation reflects this point.
  Specifically, our legislation requires the IRS to abate the 
assessment of interest on underpayment by taxpayers in Presidentially-
declared disaster areas if the IRS acts to extend the period of time 
for filing income tax returns and paying income tax by taxpayers in 
such areas. The legislation would apply to all Presidentially-declared 
disasters announced after December 31, 1996.
  Once again, the IRS wisely and promptly granted an extension for 
North Dakotans and others to file their income tax returns due to 
flood-and snow-related emergencies without facing late filing and 
payment penalties. But the IRS has been prevented from doing more by 
statute. Our legislation remedies this problem in the case of IRS 
extensions due to Presidential disaster declarations.
  We intend to advance this proposal at the first available opportunity 
in the U.S. Senate. We urge our colleagues to support this important 
initiative to provide income tax relief for those affected by this 
year's weather-related disasters and for those living in disaster areas 
in the future.
  Mr. DASCHLE. Mr. President, I would like to commend Senator Dorgan on 
the introduction of legislation authorizing the Internal Revenue 
Service to waive interest on late payments of taxes in Presidentially-
declared disaster areas. The IRS currently has authority to waive 
penalties for late tax filings following natural disasters. Last week, 
it did so in the Dakotas and part of Minnesota in response to the 
severe flooding in the region. However, the IRS does not now have 
parallel authority for waiving interest in these circumstances.
  A number of South Dakotans have raised questions about the disparate 
treatment of penalties and interest. If taxpayers deserve more time to 
file and pay their taxes due to a natural disaster, why should they be 
charged 9 percent interest, a rate many would consider punitive, on 
these same taxes? Senator Dorgan's bill would address this apparent 
anomaly in our tax laws and help numerous flood victims who are too 
busy securing their homes, businesses, and communities to file on time. 
Some of these people have been physically prevented from obtaining tax 
forms by the rising flood waters.
  For this reason, I am pleased to cosponsor Senator Dorgan's 
legislation, and I thank him for his leadership on this pressing 
matter.
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