Now that we made it past the extension filing deadline, we should turn our attention to penalty and interest letters. This post specifically applies to businesses and residents of Haywood County and other North Carolina counties which were included in the Helene federal disaster declaration.

Both the IRS and North Carolina Department of Revenue provided a disaster extension to file and pay through September 25, 2025. The disaster extension included income tax, sales tax, and payroll tax. The disaster extension also applied to 2023 tax returns on extension as of September 25, 2024. Tax payment deadlines before September 25, 2024 were unaffected by the disaster extension. Relief should be automatic.

Automatic means there should be no penalties or interest for paying or filing within the disaster extension. Unfortunately, I have seen clients receive penalty and interest notices. Below are a few tips for reading and responding to the notices.

1. Do not assume the notice is correct. Penalties and interest must account for the disaster extension. Carefully review the notice. Dates should be provided for the time periods penalties or interest are calculated. If the notice applies penalties or interest for deadlines between September 24, 2024 and September 25, 2025, the notice may be incorrect.

2. We recommend filing a request for relief. For the IRS, use Claim for Refund and Request for Abatement (IRS Form 843). Under “Penalty”, check the box for “Abatement or refund of a penalty or addition to tax due to reasonable cause or other reason allowed under the law.” Continue completing the form and check box 7(d). In the explanation section, write a simple note to refer to the Hurricane Helene September 25, 2025 disaster extension. The form should be mailed to the address in the notice, and we recommend including a copy of the notice. Send the form by Certified Mail.

For the Department of Revenue, use Request to Waive Penalties (Form NC-5500). The form may be completed online or by mail. Complete the form and, in part 3, check box 3 for natural disaster. Write a short note referring to Hurricane Helene.

You can also ask your tax adviser for assistance in completing the forms or reviewing notices.