UpTrajectory Review

The AICPA has issued a reminder to state tax authorities about the proper procedure for requesting federal disaster tax relief, timed to Hurricane Isaias' recent landfall just days before the October 15 filing deadline. The core issue: when a federally declared disaster strikes, states have a formal channel through the IRS to request relief on behalf of their affected taxpayers, and cutting corners or improvising separate state-only responses creates confusion and compliance risk. For anyone who has watched states scramble after past hurricanes, floods, and wildfires, this is a familiar pattern — the AICPA is essentially saying, we have been here before, and there is a right way to do this.

If you run a small business in a disaster-affected state, this procedural detail matters more than it sounds. Disaster tax relief typically extends filing deadlines, payment deadlines, and sometimes estimated tax requirements — but only if the relief is properly requested and granted through the correct channels. When states go rogue or delay, taxpayers are left in limbo: do they file by October 15 or not? Do they pay or wait? Penalties and interest can accumulate while the bureaucracy sorts itself out. A CPA or tax advisor representing multiple clients in a disaster zone feels this acutely, which is exactly why the AICPA is pressing the issue now rather than after the deadline passes.

What is notable here is not that the AICPA is advocating for disaster relief — that is routine — but that it is coaching states on process rather than simply lobbying for broader relief. That suggests the organization has seen enough post-disaster tax chaos to know that even well-intentioned state responses can go sideways when the proper federal coordination is skipped. The timing is also pointed: Hurricane Isaias made landfall in early August, and the October 15 extension deadline was already on the calendar. The AICPA is signaling that states should not wait until the last minute to get their requests in, because IRS processing and official guidance take time to issue.

The second-order effect worth watching is the patchwork problem. States affected by Isaias span the East Coast, and if some states follow proper procedure quickly while others lag or take unilateral action, taxpayers operating across state lines — a contractor with jobs in two states, a retailer with inventory in three — face inconsistent rules. That inconsistency is where penalties, missed elections, and amended returns pile up. It also shifts burden downstream to tax preparers, who must track which state granted what relief and communicate it to clients who may already be dealing with property damage, insurance claims, and disrupted operations.

If you or your clients are in a federally declared disaster area, the practical step is to check both the IRS disaster relief page and your state revenue department's announcements before assuming the October 15 deadline has moved. Do not rely on a news headline or a social media post — relief must be formally granted to be enforceable. If your state has not yet acted, contact your state CPA society or the AICPA's state tax team, which is actively engaging with revenue departments on this issue. And if you have already filed or paid under the assumption of an extension that was not formally granted, consult your advisor now rather than waiting for a notice.

“The AICPA is reminding states about the correct procedure to use to request disaster tax relief following Hurricane Isaias' landfall just days before the Oct. 15 filing deadline.” — Journal of Accountancy

Takeaway: If your business is in a disaster-declared state, verify formal IRS and state relief before assuming the October 15 deadline has been extended.