The American Institute of Certified Public Accountants (AICPA) has requested updates to the Internal Revenue Service’s (IRS) Draft Publication 547.
It is seeking clearer guidance for taxpayers applying for disaster tax relief under the Federal Disaster Tax Relief Act of 2023 (FDTRA).
In a letter to the IRS and the Department of the Treasury, the AICPA expressed concerns about the lack of clarity in the draft publication.
This ambiguity could lead to confusion for both taxpayers and tax practitioners in determining the criteria for qualified disaster losses.
The AICPA highlighted that the confusion is particularly problematic due to the multiple deadlines involved in qualifying for disaster relief.
Additionally, recent provisions related to disaster relief have been moved to legislative text rather than included in the Internal Revenue Code, making it more difficult to find and understand, AICPA added.
AICPA tax policy and advocacy senior manager Daniel Hauffe said: “Draft Publication 547 contains confusing and/or misleading information on the provisions of FDTRA needed for disaster victims in the preparation of their income tax returns.
“Updating this publication would help taxpayers and tax practitioners readily determine whether they or their clients are eligible for disaster tax relief.”
The AICPA’s recommendation includes specific changes to Draft Publication 547 to enhance its clarity on disaster tax relief under the FDTRA.
The suggested amendments would clarify that the FDTRA covers major disasters declared by the president from 1 January 2020 to 10 February 2025, with incident periods starting on or after 28 December 2019 and on or before 12 December 2024, and ending no later than 11 January 2025.
This initiative by the AICPA follows its recent call for public input on potential revisions to its independence rules, focusing on private equity investments in accounting firms.
