[Congressional Record Volume 143, Number 50 (Thursday, April 24, 1997)]
[Extensions of Remarks]
[Page E750]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF THE DISASTER RELIEF TAX ACT OF 1997

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                           HON. WALLY HERGER

                             of california

                    in the house of representatives

                        Thursday, April 24, 1997

  Mr. HERGER. Mr. Speaker, today I am introducing the Disaster Relief 
Tax Act of 1997, a bill which will provide important relief to 
taxpayers affected by a Presidentially declared disaster.
  Earlier this year, California experienced the worst flooding in State 
history. In the Sacramento Valley, levee failures on the Feather River, 
the Bear River, and the Sutter Bypass caused extensive flooding of over 
80,000 acres in residential and agricultural areas. Nine Californians 
tragically lost their lives in these floods, and some 120,000 others 
were displaced from their homes. In total, the floods caused more than 
$1.6 billion in damage. A full 48 of the State's 56 counties were 
declared Federal disaster areas, including each of the 10 northern 
California counties that I represent.
  Today, the newspapers are filled with more heart-breaking stories of 
incredible flooding--this time in North Dakota. We are once again 
reminded how easily lives and communities can be uprooted by the force 
of nature.
  Unfortunately, for Americans who fall victim to such disasters, the 
problems they face don't necessarily subside with the waters. 
Inflexible tax law and undue administrative burdens often cause 
individuals added grief when dealing with the Internal Revenue Service. 
In the wake of these recent disasters, it is altogether appropriate 
that the Federal Government do what it can to help provide relief to 
these taxpayers.
  The Internal Revenue Service, through regulations and other guidance, 
routinely extends many tax-related deadlines for disaster victims. 
However, many other deadlines are firmly set by law and the IRS is not 
permitted to extend them through administrative regulations. My bill 
will authorize the Secretary of the Treasury to extend these tax 
deadlines for a period of up to 90 days.
  Taxpayer actions covered by this legislation include the filing of 
tax returns, the payment of taxes, and the filing of petitions with the 
Tax Court. Additionally, my bill would allow taxpayers to retain 
eligibility for any credits or refunds during the Secretary's 
prescribed extension period. All rights associated with this 
eligibility would also be extended, permitting taxpayers to file 
appropriate claims for these credits and refunds and to bring suit upon 
these claims.
  Mr. Speaker, this problem of inflexible tax laws was highlighted by a 
recent IRS news release, dated March 12, 1997. In it, the agency 
announced that it had extended certain deadlines related to pension 
plans for taxpayers affected by federally declared disasters. However, 
it also listed a series of deadlines that the agency could not 
administratively extend because they are firmly set by law. My bill 
would grant the IRS the appropriate authority to extend any deadlines 
faced by taxpayers victimized by such disasters.
  Mr. Speaker, this legislation also simplifies the process by which 
taxpayers establish their disaster losses for tax purposes. Often, as a 
result of a Presidentially declared disaster, individuals seek Federal 
loans or Federal loan guarantees to help them rebuild their homes or 
businesses. To obtain these loans or loan guarantees, taxpayers must 
have their property damage appraised by the Federal Government. 
Incredibly, however, these taxpayers may have to obtain an additional 
appraisal to establish the amount of their losses for tax purposes. I 
believe that this duplication is an unnecessary burden to impose on 
taxpayers who have already been victimized by disasters. Taxpayers 
should be allowed to use appraisals performed or authorized by the 
Federal Emergency Management Agency, the Small Business Administration, 
or other Government agencies to calculate their disaster losses. My 
bill explicitly authorizes the IRS to issue regulations or other 
guidance implementing this change, and I anticipate that this would be 
done promptly upon enactment.
  Mr. Speaker, I believe that the Internal Revenue Service should have 
the appropriate authority to do what is fair. The Disaster Relief Tax 
Act of 1997 does just that. Americans who have already been victimized 
by floods, earthquakes, hurricanes, or other Presidentially declared 
disasters should not also be victimized by inflexible tax laws and 
undue administrative burdens. I urge my colleagues to cosponsor this 
important and much-needed legislation.

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