November 1, 2012

The Honorable Douglas H. Shulman Commissioner Internal Revenue Service 1111 Constitution Avenue, NW Washington, DC 20224

Re:

Request for Further Relief Due to Hurricane Sandy for Various Tax and Information Returns and Payments Otherwise Due November 15, 2012 and Beyond

Dear Commissioner Shulman: The American Institute of Certified Public Accountants (AICPA) and its members truly appreciate the quick action of the Internal Revenue Service (IRS) to release IR-2012-82 on October 31, 2012 regarding the additional time provided to various taxpayers and preparers affected by Hurricane Sandy to file returns and accompanying payments that would normally be due by October 31, 2012, to file and pay by November 7, 2012. IR-2012-82 indicates that the IRS expects to grant additional filing and payment relief as qualifying disaster declarations are issued by the Federal Emergency Management Agency (FEMA). Given the size of this storm and the wide-spread areas that have experienced damage as a result, it may take quite some time for FEMA to make all of those declarations. This is an extraordinary situation. While the full level of destruction remains to be seen and determined, the fact is that much of the damage has occurred in areas not used to dealing with storms of this magnitude. The region is densely populated. There have been unprecedented events such as New York City completely shutting down mass transit for over three days (with some parts to remain shut for a week or more), the federal government in Washington, DC closing for two days with mass transit in the metro DC area closed for a day and a half, and so much more. Some of our members are experiencing disruptions of utilities at their residences and offices. Many do not have electricity, phone or internet service, and do not know when those services will be available to them. Those utilities and services are just some of the important tools used to gather the necessary information, prepare, and file tax and information returns and payments. This situation merits an extraordinary response from the IRS FEMA declaration or not.

The Honorable Douglas H. Shulman November 1, 2012 Page 2 of 5 We understand that the IRS has authority through administrative pronouncement via press release to grant relief for filing deadlines for those individuals in affected areas. We hope that the IRS considers some amount of broader relief than typically provided in disasters. At a minimum, any relief should at least consider factors such as where the taxpayer is located, where the taxpayers preparer is located, and where the taxpayers records are located. If any of those locations fall within the areas impacted by Hurricane Sandy, we request that the relief be extended to those items. However, the impacts of this hurricane have been, and continue to be so broad, that some additional relief is warranted for many situations. In IR-2011-88, IRS provided preparer relief for taxpayers affected by Hurricane Irene that went beyond the relief in federally declared disaster areas, setting a precedent to providing similar relief now for victims of Hurricane Sandy.

Specific Relief for Exempt Organizations As IRS works on additional tax filing relief, we ask that you pay particular attention to the various returns of exempt organizations that have some significant deadlines quickly approaching. Some examples of returns and payments due on November 15, 2012 include: Calendar 2011 filings of Form 990, Return of Organization Exempt from Income Tax, Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, and Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation, where the organization requested and received a second extension of time to file. This is the final deadline no further extensions are typically available. Calendar 2011 filings of Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e)), where the organization previously extended the return. Fiscal year ended March 31, 2012 filings of Form 990, Form 990-EZ, and Form 990PF. These organizations can request a second extension of time to file, however such extension is not automatic and requires IRS approval. Fiscal year ended June 30, 2012 filings of Form 990, Form 990-EZ, Form 990-PF, and Form 990-T. These organizations will need to file for the first extension request by November 15, 2012. First quarter estimated tax payments for Forms 990 and 990-PF for fiscal year ending June 30, 2013 entities.

Many of these exempt organizations and their employees, volunteers, and tax preparers or other advisors may have been located in geographical areas that were (and continue to be) affected by Hurricane Sandy. Other exempt organizations outside those geographical areas may also be impacted in the short term due to the many transportation, utility, and communication disruptions felt throughout the entire United States. Further, many exempt organizations are actually involved in relief efforts associated with Hurricane Sandy. An extension of time will allow the exempt organizations to focus their attention on helping the

The Honorable Douglas H. Shulman November 1, 2012 Page 3 of 5 impacted individuals in their most immediate short term needs, as well as planning for the more intermediate-term and long-term assistance that will be necessary. The AICPA recommends that the IRS provide relief as soon as possible, preferably this week, to help these organizations and tax preparers. Such relief would reduce the additional stress some individuals may be facing from the impacts of both the approaching filing deadlines as well as the impacts and disruption they may have (and continue to face) due to Hurricane Sandy. Such relief could be provided in stages, with possibly an initiallyannounced short extension for all exempt organization returns and tax payments otherwise due by November 15, 2012, regardless of the geographical location of the organization or its preparer, and then with a later-announced additional extension of time for those organizations and preparers that are located within qualified disaster declaration areas.

Relief for Tax Returns and Payments of Other Taxpayers While November 15th is not as significant a deadline for tax returns of taxpayers other than exempt organizations, it can also still be applicable to various fiscal year-end taxpayers. For example: C corporations or S corporations with either a February 29, 2012 fiscal year end (that have been properly extended) or an August 31, 2012 fiscal year end; partnerships, trusts and estates (e.g., Form 1041, U.S. Income Tax Return for Estates and Trusts) with a February 29, 2012 fiscal year end (that have been properly extended) or a July 31, 2012 fiscal year end; employee benefit plans with a January 31, 2012 plan year for filing Form 5500, Annual Return / Report of Employee Benefit Plan; estates filing Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, for decedents dying on or after January 29, 2012, and for decedents dying on or after July 29, 2011 that have been extended (for estates, the Form 706 is due nine months after the date of the decedents death; thus, estates with original due and extended due dates starting October 29, 2012 should be given filing relief); and, estates filing Form 1041.

Certain short tax years for all types of returns may be affected as well. For some of these returns, there may be potential tax accounting methods that the taxpayer desires to adopt or automatically change to under the authority of various revenue procedures, or elections that must be made in timely filed returns in order to be properly adopted, such as the portability election for estates. Those elections are also at risk if further action is not taken by the IRS. In addition, various quarterly estimated tax payments may be due on November 15th for a variety of types of taxpayers with various fiscal year ends.

The Honorable Douglas H. Shulman November 1, 2012 Page 4 of 5 Relief for Information Returns and Payments There are also information returns and payments due on November 15th or November 30th for other types of filers that should also be considered as part of broader relief. For example, some payroll returns and deposits will also be due on or before November 15th. Certain excise tax returns may be due at the end of November as well.

Relief for Other Time-Sensitive Acts Many other situations can also be time sensitive; a non-exhaustive list of examples include: the filing of a private letter ruling request; the time to respond to an IRS information request upon examination or at appeals; the permissible period to request a change in tax accounting period; the permissible period to request certain changes in tax accounting method that require prior approval from the IRS; and, the time to request a Collection Due Process (CDP) administrative hearing or to appeal the determination to the U.S. Tax Court or a U.S. district court.

We recommend that the IRS carefully consider the full list of time-sensitive acts as described in Revenue Procedure 2007-56 to ensure that any additional relief provided is as comprehensive as possible.

* * * * *

The above illustrative situations are not a comprehensive list of all impacted taxpayers or all impacted information filings, tax return filings and payments expected to be due within the coming month, but helps to demonstrate how many taxpayers can be impacted even in a short period of time. Given that there are many filings due by November 15th, especially by exempt organizations, this time sensitive heightens the desperate need for a very quick response from the IRS for further relief due to Hurricane Sandy. These recommendations were developed with the input of many of the AICPAs tax technical resource panels and committees, and approved by the AICPA Tax Executive Committee. The AICPA is the worlds largest member association representing the accounting profession, with nearly 386,000 members in 128 countries and a 125-year heritage of serving the public interest. Our members advise clients on federal, state and international tax matters and prepare income and other tax returns for millions of Americans. Our members provide services to individuals, not-for-profit organizations, small and mediumsized businesses, as well as Americas largest businesses.

The Honorable Douglas H. Shulman November 1, 2012 Page 5 of 5

We appreciate your consideration of these recommendations. If you have any questions regarding this submission, please feel free to contact me at (304) 522-2553, or jporter@portercpa.com; Edward S. Karl, AICPA Vice President Taxation, at (202) 4349228, or ekarl@aicpa.org; or Melissa Labant, AICPA Director of Tax Advocacy & Professional Standards, at (202) 434-9234, or mlabant@aicpa.org. Respectfully submitted,

Jeffrey A. Porter, CPA Chair, Tax Executive Committee cc: Steven Miller, Internal Revenue Service, Deputy Commissioner Services & Enforcement Faris Fink, Internal Revenue Service, Commissioner, Small Business / SelfEmployed Division Ruth Perez, Internal Revenue Service, Deputy Commissioner, Small Business / SelfEmployed Division Joseph Grant, Internal Revenue Service, Acting Commissioner, Tax Exempt & Government Entities Division Lois Lerner, Internal Revenue Service, Director, Exempt Organizations Candice Cromling, Internal Revenue Service, Director, National Public Liaison