31146 Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Rules and Regulations 

he or she believes that any claims or 

offsets might have survived the 

discharge of a debtor. 

Subpart F—Discharge of Indebtedness 

and Reporting Requirements 

■ 41. Revise § 213.35 to read as follows: 

§ 213.35 Discharging indebtedness— 

general. 

(a) Before discharging a delinquent 

debt (also referred to as a close out of 

the debt), the CFO must take all 

appropriate steps to collect such debt, 

including (as applicable), the following: 

(1) Administrative offset; 

(2) Tax-refund offset; 

(3) Offset of Federal salary; 

(4) Referral to private collection 

contractors; 

(5) Referral to Federal Departments or 

Agencies that are operating a debtcollection center; 

(6) Reporting delinquencies to creditreporting bureaus; 

(7) Garnishing the wages of a 

delinquent debtor; and 

(8) Litigation or foreclosure. 

(b) The CFO will make a 

determination that collection action is 

no longer warranted and request that 

litigation counsel release any liens of 

record that are securing the debt. 

Discharge of indebtedness is distinct 

from the termination or suspension of 

collection activity, and the Internal 

Revenue Code might apply. When the 

CFO suspends or terminates collection 

action on a debt, the debt remains 

delinquent, and USAID may pursue 

further collection action at a later date 

in accordance with the standards set 

forth in this part. When a debt is 

discharged in full or in part, further 

collection action is prohibited, and 

USAID must terminate debt-collection 

action. 

■ 42. Revise § 213.36 to read as follows: 

§ 213.36 Reporting to Department of the 

Treasury’s Internal Revenue Service. 

Upon discharge of indebtedness, 

USAID must report the discharged debt 

as income to the debtor to the IRS in 

accordance with the requirements of 26 

U.S.C. 6050P and 26 CFR 1.6050P–1. 

USAID may request Fiscal Service to file 

such a discharge debt report to the IRS 

on the Agency’s behalf. 

Subpart G—Referrals to the U.S. 

Department of Justice 

■ 43. Revise the heading for subpart G 

to read as set forth above. 

■ 44. Amend § 213.37 by revising the 

section heading and paragraph (a) to 

read as follows: 

§ 213.37 Referrals to the U.S. Department 

of Justice. 

(a) The CFO, through USAID’s crossservicing agreement with Fiscal Service 

and by direct action, refers to DOJ for 

litigation all claims on which the 

Federal Government has taken 

aggressive collection actions but which 

could not be collected, compromised, 

suspended, or terminated. USAID makes 

such referrals as early as possible, 

consistent with aggressive Agency 

collection action, and within the period 

for bringing a timely suit against the 

debtor. Unless otherwise provided by 

DOJ’s regulations or procedures, USAID 

refers for litigation debts of more than 

$2,500 but less than $1 million to DOJ’s 

Nationwide Central Intake Facility, as 

required by the instructions for the 

Claims-Collection Litigation Report 

(CCLR). USAID shall refer debts of more 

than $1 million to the Civil Division at 

DOJ. 

* * * * * 

Subpart H—Mandatory Transfer of 

Delinquent Debt to U.S. Department of 

the Treasury 

■ 45. Revise the heading for subpart H 

to read as set forth above. 

■ 46. Revise § 213.38 to read as follows: 

§ 213.38 Mandatory transfer of debts to 

Department of the Treasury’s Bureau of the 

Fiscal Service—general. 

(a) USAID’s procedures call for the 

transfer of legally enforceable debt to 

Fiscal Service 90 days from the date 

provided on the Agency’s initial written 

demand-for-payment notice issued to 

the debtor. A debt is legally enforceable 

if the Agency has made a final 

determination that the debt, in the 

amount stated, is due and there are no 

legal bars to collection action. A debt is 

not considered legally enforceable for 

purposes of mandatory transfer to Fiscal 

Service if a debt is the subject of a 

pending administrative review process 

required by statute or regulation and 

collection action during the review 

process is prohibited. 

(b) Except as set forth in paragraph (a) 

of this section, USAID will transfer any 

debt covered by this part that is more 

than 120 days delinquent to Fiscal 

Service for debt-collection services. A 

debt is considered 120 days delinquent 

for purposes of this section if it is 120 

days past due and is legally enforceable. 

■ 47. Amend § 213.39 by revising the 

introductory text and adding a period at 

the end of paragraph (f). 

The revision reads as follows: 

§ 213.39 Exceptions to mandatory transfer. 

USAID is not required to transfer a 

debt to the Financial Management 

Service (FMS) of the U.S. Department of 

the Treasury pursuant to § 214.37(b) 

during such period of time that the debt: 

* * * * * 

Kent Kuyumjian, 

Deputy Chief Financial Officer. 

[FR Doc. 2021–11245 Filed 6–10–21; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 301 

[TD 9950] 

RIN 1545–BP98 

Mandatory 60-Day Postponement of 

Certain Tax-Related Deadlines by 

Reason of a Federally Declared 

Disaster 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations relating to the new 

mandatory 60-day postponement of 

certain time-sensitive tax-related 

deadlines by reason of a federally 

declared disaster. This document also 

contains final regulations clarifying the 

definition of ‘‘federally declared 

disaster.’’ These final regulations affect 

individuals who reside in or were killed 

or injured in a disaster area, businesses 

that have a principal place of business 

in a disaster area, relief workers who 

provide assistance in a disaster area, or 

any taxpayer whose tax records 

necessary to meet a tax deadline are 

located in a disaster area. 

DATES:

Effective Date: These regulations are 

effective on June 11, 2021. 

Applicability Date: The date of 

applicability for the amendment to the 

Procedure and Administration 

Regulations under section 7508A is 

December 21, 2019, as explained below 

in SUPPLEMENTARY INFORMATION. 

The date of applicability for the 

amendment to the Income Tax 

Regulations under section 165 of the 

Code to clarify the definition of the term 

‘‘federally declared disaster’’ is June 11, 

2021. 

FOR FURTHER INFORMATION CONTACT: 

Andrew C. Keaton at (202) 317–5404 

(not a toll-free number). 

SUPPLEMENTARY INFORMATION: 


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Background 

Section 205 of the Taxpayer Certainty 

and Disaster Tax Relief Act of 2019, 

enacted as Division Q of the Further 

Consolidated Appropriations Act, 2020, 

Public Law 116–94, 133 Stat. 2534, 

3226, amended section 7508A of the 

Code, relating to the discretionary 

authority of the Secretary of the 

Treasury or her delegate (Secretary) to 

postpone certain time-sensitive tax 

deadlines by reason of a federally 

declared disaster, by adding section 

7508A(d). This provision provides 

qualified taxpayers a mandatory 60-day 

period that is to be disregarded ‘‘in the 

same manner as a period specified 

under [section 7508A(a)].’’ 

On January 13, 2021, the IRS 

published in the Federal Register a 

notice of proposed rulemaking (REG– 

115057–20, 86 FR 2607) to interpret and 

implement sections 165(i)(5) and 

7508A(d). Five responsive written 

comments were received. No 

commenter requested a public hearing, 

so none was held. 

As described more fully in the 

preamble to the proposed regulations, 

section 7508A(d) is ambiguous in at 

least two important respects—the timesensitive acts to be postponed (beyond 

the pension-related actions described in 

section 7508A(d)(4)) are not specified 

and it is unclear how the mandatory 60- 

day postponement period is to be 

calculated when the disaster declaration 

specified in section 7508A(d) does not 

contain an incident date. The legislative 

history is also insufficient to explain 

these areas of ambiguity. 

These final regulations amend the 

Procedure and Administration 

Regulations (26 CFR part 301) under 

section 7508A and the Income Tax 

Regulations (26 CFR part 1) under 

section 165 to clarify the definition of 

the term ‘‘federally declared disaster.’’ 

As described further below, the 

Department of the Treasury (Treasury 

Department) and the IRS have modified 

proposed § 301.7508A–1(g)(4)(iii), 

Example (3), in these final regulations to 

better illustrate the calculation of the 

mandatory 60-day postponement period 

and to correct typographical errors. No 

other changes have been adopted. 

Comments on the Proposed Regulations 

Section 1.165–11(b)(1) 

The proposed regulations provided 

that a federally declared disaster 

includes both a major disaster and an 

emergency declared under sections 401 

or 501, respectively, of the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act (Stafford Act), Public 

Law 100–707,102 Stat. 4689 (1988). 

One commenter said it approved of 

the proposed regulations including 

emergency declarations in the definition 

of a federally declared disaster under 

section 165(i)(5)(A). However, another 

commenter was critical of this portion 

of the proposed regulations and 

recommended that it be stricken. This 

second commenter said emergency 

declarations are governed by a different 

set of rules than major disaster 

declarations, pointing out that 

emergency declarations (i) do not need 

to be preceded by a governor’s request 

for Stafford Act relief (but may instead 

be declared sua sponte by the 

President), (ii) may only result (if not 

followed up by a major disaster 

declaration) in Federal assistance to 

local governmental entities (as opposed 

to assistance to individuals), and (iii) 

may be issued before a disaster. This 

commenter further opined that 

President Trump’s letter of March 13, 

2020, declaring an emergency under the 

Stafford Act with respect to the COVID– 

19 pandemic, was not authorized by 

Congress to serve as a disaster 

declaration under sections 165(i)(5)(A) 

and 7508A of the Code. 

The comment from the second 

commenter is not adopted in the final 

regulations. In the Explanation of 

Provisions section of the preamble to 

the proposed regulations, Part III. 

Federally Declared Disasters, this issue 

is already addressed in detail. There is 

no provision in the Stafford Act to 

declare a ‘‘disaster.’’ The legislative 

history of the Stafford Act indicates that 

the term ‘‘disaster’’ is an umbrella term 

that includes both an emergency and a 

major disaster. The Conference Report 

to the Disaster Relief and Emergency 

Assistance Act of 1974, Public Law 93– 

288, 88 Stat. 143 (1974), clarified the 

definitional section of the Stafford Act, 

stating: ‘‘It was the intention of the 

conferees not to define the term 

‘disaster’ specifically; whenever used in 

this legislation such term includes an 

emergency or a major disaster.’’ H.R. 

Rep. 93–1037, p. 26 (May 13, 1974). 

The opening section of the Stafford 

Act, titled ‘‘Congressional findings and 

declarations,’’ uses the generic term 

‘‘disaster’’ in laying out the key 

congressional findings and declarations 

that underlie the rest of the chapter’s 

provisions. Stafford Act section 101(a), 

42 U.S.C. 5121(a). In multiple revenue 

rulings, the IRS has provided that, for 

the purposes of section 165(i), a 

federally declared disaster includes an 

emergency or a major disaster declared 

under the Stafford Act. Several of these 

revenue rulings are cited in the 

preamble to the proposed regulations. 

The differences noted by the 

commenter between emergencies and 

major disasters under the Stafford Act 

are not material to their treatment under 

sections 165(i)(5)(A) and 7508A of the 

Code. Most disaster declarations 

announced by the Federal Emergency 

Management Agency (FEMA) for 

particular states also provide only 

public assistance, and no individual 

assistance, to particular counties in the 

state under the Stafford Act. In addition, 

most emergency declarations 

announced by FEMA are under section 

501(a) of the Stafford Act, and begin 

with a request from a governor or other 

chief executive of a state, territory, or 

tribal government. As noted in the 

preamble to the proposed regulations, it 

is rare for an emergency declaration to 

be made without such a request. The 

President is authorized to make an 

emergency declaration under section 

501(b) of the Stafford Act when the 

United States will have the primary 

responsibility for response to the 

emergency. There is no difference in the 

need for affected persons in a state 

threatened with a disaster to receive 

relief from time-sensitive deadlines to 

perform specified acts under the Code 

when the request for such relief 

originates with the state’s governor or is 

independently raised by the President. 

Consequently, the final regulations 

make no changes to this portion of the 

proposed regulations. 

Section 301.7508A–1(g)(1)–(2) 

The proposed regulations provided 

that (excluding the pension-related acts 

described in section 7508A(d)(4)) the 

time-sensitive tax acts that are 

postponed for the mandatory 60-day 

postponement period are the acts, if 

any, that the Secretary determines to be 

postponed under section 7508A(a) or 

(b). 

One commenter expressed a general 

concern that this provision had the 

potential to reduce section 7508A(d) to 

a nullity. A second commenter 

expressed its concerns specifically in 

terms of what it contended was a clear 

reading of the statute and its legislative 

history. This commenter said it was 

clear that Congress intended to 

postpone the timely performance of all 

of the time-sensitive tax acts, both 

taxpayer and government acts, listed in 

section 7508(a)(1) of the Code. However, 

this second commenter recommended 

that the final regulations provide that 

the government may take advantage of 

the postponement periods for 

government-initiated actions only if a 

taxpayer first acts in reliance on the 

‘‘automatic’’ postponement periods for 

the taxpayer’s time-sensitive tax acts. 


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A third commenter agreed with the 

Secretary’s characterizations of the 

statute and legislative history as 

ambiguous on the issues of which timesensitive tax acts (other than the 

pension-related tax acts described in 

section 7508A(d)(4)) are postponed 

under section 7508A(d) and of which 

declared disasters are subject to the 

mandatory 60-day postponement period 

under section 7508A(d). This 

commenter approved of the solution to 

these ambiguities that was reflected in 

the proposed regulations, in terms of 

which time-sensitive tax acts would be 

postponed. This commenter said section 

7508A(d) was a poorly-worded statute, 

that the legislative history of the 

provisions contained contradictions, 

and the result was that section 

7508A(d)(1) leaves no (non-pension) 

time-sensitive tax acts for section 

7508A(d) to operate upon, unless or 

until the Secretary exercises her powers 

under section 7508A(a). 

The third commenter noted also that 

for the year 2017, the IRS provided 

relief under section 7508A(a) in 

response to only 14 of the 59 major 

disaster declarations announced by 

FEMA that year. If all major disaster 

declarations automatically entitled all 

taxpayers in disaster areas to timing 

relief under section 7508A(d), the 

commenter noted that there would be a 

dramatic increase in the number of 

disasters leading to postponements of 

time-sensitive tax acts. On these issues, 

the third commenter concluded that the 

proposed regulations properly preserved 

the discretion of the IRS to determine 

which declared disasters should result 

in any type of disaster relief and of 

which time-sensitive tax acts should be 

postponed under section 7508A. 

The comments from the first two 

commenters on this issue are not 

adopted in the final regulations, while 

the approving comments of the third 

commenter were already reflected in the 

proposed regulations. As explained 

more fully in the Explanation of 

Provisions section of the preamble to 

the proposed regulations, Part I. TimeSensitive Tax Acts, and as noted by the 

third commenter described above, 

except for the rules regarding pensions 

described in section 7508A(d)(4), 

section 7508A(d), by its terms, does not 

specify the time-sensitive tax acts to be 

postponed during the mandatory 60-day 

postponement period. Instead, section 

7508A(d)(1) provides that the 

mandatory 60-day postponement period 

‘‘shall be disregarded in the same 

manner as a period specified under 

[section 7508A(a)].’’ Section 7508A(a) is 

not self-executing, but rather, requires a 

determination by the Secretary to 

specify the acts to be postponed. As a 

result, the cross-reference to section 

7508A(a) in section 7508A(d)(1) 

operates to require the same 

determination by the Secretary as a 

prerequisite to determining the acts to 

which the mandatory 60-day 

postponement period applies. This 

interpretation gives full effect to the 

statutory language and does not reduce 

section 7508A(d) to a nullity, because 

that section still imposes a mandatory 

period for postponement and establishes 

a new category of persons eligible for 

relief—the ‘‘qualified taxpayers’’ 

defined in section 7508A(d)(2). The 

final regulations make no changes to 

§ 301.7508A–1(g)(1) and (2) of the 

proposed regulations. 

Section 301.7508A–1(g)(3)(i) 

Section 301.7508A–1(g)(3)(i) of the 

proposed regulations tracked section 

7508A(d)(1) and (d)(5) in describing 

how the mandatory 60-day 

postponement period for federally 

declared disasters will be calculated and 

how the calculation of that mandatory 

postponement period will interact with 

the Secretary’s discretionary 

postponement period (if any) under 

section 7508A(a) and (b). The 

Explanation of Provisions section of the 

preamble to the proposed regulations, 

Part II. Calculation of the Mandatory 60- 

Day Postponement Period, identified a 

120-day postponement period from the 

beginning incident date of a disaster 

announced by FEMA as the usual 

postponement period provided by the 

IRS for those disasters where the IRS 

exercises its discretion under section 

7508A(a) or (b) to postpone any timesensitive tax acts. 

Consequently, most mandatory 60-day 

postponement periods under section 

7508A(d) will be calculated to run 

concurrently with the 120-day 

postponement period the IRS generally 

provides under section 7508A(a) or (b). 

Two commenters noted that section 

7508A(d)(1) and the proposed 

regulations did not provide a clear rule 

for calculating the mandatory 60-day 

postponement period when there was 

more than one disaster declaration 

issued for the same disaster in a 

particular state or when any disaster 

declaration was amended to provide any 

new or modified incident dates (earliest 

or latest) that were missing or different 

from when the first disaster declaration 

for a disaster in a state was announced 

by FEMA. Two commenters suggested 

potential alternative methods of making 

calculations of the mandatory 60-day 

postponement period more certain 

when there are multiple disaster 

declarations or disaster declarations that 

are amended by FEMA for the earliest 

or latest incident dates described in 

section 7508A(d)(1)(A) and (B). 

One commenter claimed that a literal 

reading of section 7508A(d)(1) creates 

challenges for indefinite disasters, such 

as the COVID–19 pandemic, because the 

statute could be interpreted to postpone 

a taxpayer’s deadlines ‘‘indefinitely 

until some unknown point in time that 

is long after the disaster began.’’ To 

avoid this ‘‘unworkable application’’ of 

the statute, this commenter 

recommended that if the initial disaster 

declaration does not expressly identify 

the latest incident date for a disaster, 

then section 7508A(d) should be 

interpreted as automatically providing a 

postponement period until the date that 

is 60 days after the earliest incident date 

specified in a disaster declaration. 

However, the statute mitigates the 

commenter’s concern by directing that 

the postponement period under section 

7508A(d) ‘‘shall be disregarded in the 

same manner as a period specified 

under subsection (a).’’ That provision 

ensures that the Secretary retains the 

same discretion as she has under section 

7508A(a) to determine what timesensitive tax acts, if any, will be 

postponed. 

A second commenter noted what it 

characterized as a pick-and-choose 

problem and an amendment problem 

with the method of calculating the 

mandatory 60-day postponement period 

provided for in the proposed regulations 

and recommended the Secretary adopt 

one of several alternative bright-line 

rules it suggested for making the 

calculation period more predictable. 

This second commenter noted there 

was a potential pick-and-choose 

problem among multiple potential 

FEMA-announced disaster declarations, 

because the Treasury Department and 

the IRS propose to treat FEMAannounced emergency declarations (as 

well as major disaster declarations) 

under the Stafford Act as federally 

declared disasters under sections 165 

and 7508A of the Code. This 

commenter’s recommendation to strike 

proposed amended regulation § 1.165– 

11(b)(1) is discussed and rejected in the 

preamble discussion of this issue above. 

Alternatively, the second commenter 

recommended that the final regulations 

reflect a bright-line rule to address 

potential multiple declarations, such as 

a first-out rule (the first issued 

declaration controls), a rule that a later 

major disaster declaration controls over 

an earlier emergency declaration, or a 

rule that the issue date of an emergency 

declaration is the earliest incident date 

for section 7508A(d)(1)’s mandatory 60- 

day postponement period. 


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The second commenter further 

recommended in this section of the final 

regulations that the Treasury 

Department and the IRS provide a 

bright-line rule concerning the effect of 

potential amendments to an initial 

FEMA announced disaster declaration 

on how the mandatory 60-day 

postponement period is calculated. The 

additional potential bright-line 

alternatives suggested by the second 

commenter were that (i) future 

amendments will not affect how the 

mandatory period is calculated, or (ii) 

only amendments made within a certain 

amount of time (say one year) will affect 

the computation of the mandatory 

period. 

The Treasury Department and the IRS 

appreciate the predictability offered by 

the bright-line rules suggested by the 

second commenter. Nevertheless, the 

statutory language providing for a 

mandatory period beginning on the 

earliest incident date specified in the 

disaster declaration and ending on the 

date which is 60 days after the latest 

incident date so specified is capable of 

being applied as written. While 

amendments to disaster declarations 

and shifting ‘‘latest’’ incident dates can 

cause confusion, the intent of the statute 

is to ensure that relief is provided 

throughout the disaster period, 

assuming such a period is identified in 

the disaster declaration and the 

Secretary has determined that 

postponement of time-sensitive tax acts 

is warranted. As a result, the comment 

on this issue is not adopted in the final 

regulations. 

Section 301.7508A–1(g)(3)(ii)(A) 

The proposed regulations provided 

that in no event will the mandatory 60- 

day postponement period be calculated 

to exceed one year. One commenter 

stated that this portion of the proposed 

regulations should be removed because 

it lacks any basis in the text or 

legislative history of section 7508A(d)(1) 

or (d)(4). 

The comment on this issue is not 

adopted in the final regulations. As 

stated in the Explanation of Provisions 

section of the preamble to the proposed 

regulations, Part II. Calculation of the 

Mandatory 60-Day Postponement 

Period, it defies logic for the Secretary’s 

discretionary postponement period 

under section 7508A(a) to be limited to 

‘‘a period of up to 1 year,’’ and there be 

no limit on the mandatory 60-day 

postponement period under section 

7508A(d). Interpreting section 7508A(d) 

to allow postponement periods for more 

than 1 year would be contrary to the 

directive of section 7508A(d)(1) that the 

mandatory 60-day postponement period 

must ‘‘be disregarded in the same 

manner as a period specified under 

[section 7508A(a)].’’ The final 

regulations make no change to 

§ 301.7508A–1(g)(3)(ii)(A) of the 

proposed regulations. 

Section 301.7508A–1(g)(4)(iii) Example 

(3) 

The proposed regulations provided an 

Example (3) concerning a continuing 

disaster declaration involving wildfires 

that was later amended by a subsequent 

FEMA announcement of a latest 

incident date for the disaster. This 

example contained typographical errors, 

including a misnumbering—‘‘(5)’’ 

instead of ‘‘(4)’’—of the subparagraph 

for the four examples and referring to 

the taxpayer in the example variously as 

‘‘Individual C’’ and ‘‘Individual D.’’ 

One commenter further noted that the 

intended rules, if any, which Example 

(3) was meant to illustrate were not 

described in the portions of the 

proposed regulations which precede the 

Examples section. 

Example (3) is intended to illustrate 

the calculation of the mandatory 60-day 

postponement period in the event of an 

ongoing disaster with multiple 

declarations and shifting ‘‘latest’’ 

incident dates described in 

§ 301.7508A–1(g)(3) of these final 

regulations. The Treasury Department 

and the IRS have modified Example (3) 

in these final regulations, in 

consideration of the comment above as 

well as the comments received on 

§ 301.7508A–1(g)(3)(i), to better 

illustrate the calculation of the 

mandatory 60-day postponement period 

and to correct typographical errors. 

Section 301.7508A–1(h)(2) 

The proposed regulations provided 

that the final regulations shall apply to 

all disasters declared on or after 

December 21, 2019. 

One commenter requested not only 

that the final regulations not be 

retroactive to the effective date of 

section 7508A(d), but that the final 

regulations provide relief to any 

individuals or employee benefit plans 

that took actions (or failed to take 

actions) based on a good faith and 

reasonable interpretation of the 

postponement relief provided in section 

7508A. The commenter further 

requested that such good faith relief be 

available for at least 60 days after the 

final regulations are published in the 

Federal Register. 

The Applicability Date discussion in 

the preamble to the proposed 

regulations clearly indicated the 

intention of the Treasury Department 

and the IRS to rely on the provisions of 

section 7805(b)(2) of the Code for the 

applicability date of these final 

regulations. Section 7805(b)(2) provides 

that regulations filed or issued within 

18 months of the date of enactment of 

the statutory provision to which the 

regulations relate are not prohibited 

from applying retroactively to the date 

of enactment. Section 7508A(d) was 

enacted on December 20, 2019, and 

these final regulations have been filed or 

issued within 18 months of that date of 

enactment. The proposed regulations 

were clear in stating that the Treasury 

Department and the IRS intended for the 

final regulations to apply to any 

disasters that were declared on or after 

December 21, 2019. These final 

regulations do not adopt the 

commenter’s request to modify 

§ 301.7508A–1(h)(2) of the proposed 

regulations. 

New Rule Proposal 

One commenter requested that the 

final regulations ‘‘confirm’’ that all 

forms of deadline relief requested under 

section 7508A are optional for affected 

taxpayers. In particular, the commenter 

focused on deadlines arising under 

employee benefit plans. In some cases, 

the application of these deadlines may 

affect both the plan and the participants. 

After consideration, the Treasury 

Department and the IRS have concluded 

that the suggestions made in this 

comment are beyond the intended scope 

of the proposed regulations. 

Consequently, the suggestions are not 

adopted in these final regulations. 

Modifications of Proposed Regulations 

Section 301.7508A–1(g)(4)(iii) Example 

(3) 

Example (3) is modified to better 

illustrate the calculation of the 

mandatory 60-day postponement period 

in the event of multiple declarations 

and shifting ‘‘latest’’ incident dates, and 

to correct typographical errors. 

Applicability Dates 

For date of applicability for the 

amendment to the Procedure and 

Administration Regulations under 

section 7508A, see § 301.7508A–1(h), 

which provides that the regulations 

promulgated by this Treasury decision 

are applicable for federally declared 

disasters that are declared on or after 

December 21, 2019, as explained in the 

preamble to the proposed regulations 

(REG–115057–20) published in the 

Federal Register (86 FR 2607), because 

section 7805(b)(2) of the Internal 

Revenue Code (Code) provides that 

regulations filed or issued within 18 

months of the date of the enactment of 


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31150 Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Rules and Regulations 

the statutory provision to which they 

relate may apply to taxable periods prior 

to those described in section 7805(b)(1) 

and these final regulations are being 

published within 18 months of the 

enactment of section 7508A(d) on 

December 20, 2019. 

The date of applicability for the 

amendment to the Income Tax 

Regulations under section 165 of the 

Code to clarify the definition of the term 

‘‘federally declared disaster’’ is June 11, 

2021. 

Special Analyses 

Certain IRS regulations, including 

these, are exempt from the requirements 

of Executive Order 12866, as 

supplemented and affirmed by 

Executive Order 13563. Therefore, a 

regulatory assessment is not required. 

Pursuant to the Regulatory Flexibility 

Act (5 U.S.C. chapter 6), it is hereby 

certified that these regulations will not 

have a significant economic impact on 

a substantial number of small entities. 

The regulations clarify how the 

Secretary may postpone certain timesensitive tax deadlines by reason of a 

federally declared disaster. Such 

postponements provide more time for 

affected taxpayers to complete timesensitive acts than they otherwise 

would have under the internal revenue 

laws. In addition, the regulations do not 

impose a collection of information 

burden on any person, including small 

entities, for purposes of the Regulatory 

Flexibility Act (5 U.S.C. chapter 6). 

Accordingly, the Secretary certifies that 

the regulations will not have a 

significant economic impact on a 

substantial number of small entities. 

Pursuant to section 7805(f) of the 

Internal Revenue Code, the notice of 

proposed rulemaking preceding these 

final regulations was submitted to the 

Chief Counsel for Advocacy of the Small 

Business Administration for comments 

on its impact on small business, and no 

comments were received. 

Drafting Information 

The principal authors of these final 

regulations are Andrew C. Keaton and 

William V. Spatz of the Office of 

Associate Chief Counsel (Procedure and 

Administration). However, other 

personnel from the Treasury 

Department and the IRS participated in 

their development. 

List of Subjects 

26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

26 CFR Part 301 

Employment taxes, Estate taxes, 

Excise taxes, Gift taxes, Income taxes, 

Penalties, Reporting and recordkeeping 

requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, 26 CFR parts 1 and 301 

are amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 2. Section 1.165–11 is amended 

by revising paragraphs (b)(1) and (h) to 

read as follows: 

§ 1.165–11 Election to take disaster loss 

deduction for preceding year. 

* * * * * 

(b) * * * 

(1) A federally declared disaster 

means any disaster subsequently 

determined by the President of the 

United States to warrant assistance by 

the Federal Government under the 

Robert T. Stafford Disaster Relief and 

Emergency Assistance Act (Stafford 

Act). A federally declared disaster 

includes both a major disaster declared 

under section 401 of the Stafford Act 

and an emergency declared under 

section 501 of the Stafford Act. 

* * * * * 

(h) Applicability dates—(1) In general. 

Except as provided in paragraph (h)(2) 

of this section, this section applies to 

elections and revocations that are made 

on or after October 16, 2019. 

(2) Paragraph (b)(1) of this section. 

The second sentence of paragraph (b)(1) 

of this section applies to elections and 

revocations that are made on or after 

June 11, 2021. 

PART 301—PROCEDURE AND 

ADMINISTRATION 

■ Par. 3. The authority citation for part 

301 continues to read in part as follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 4. Section 301.7508A–1 is 

amended by revising paragraph (g) and 

adding paragraph (h) to read as follows: 

§ 301.7508A–1 Postponement of certain 

tax-related deadlines by reasons of a 

federally declared disaster or terroristic or 

military action. 

* * * * * 

(g) Mandatory 60-day 

postponement—(1) In general. In 

addition to (or concurrent with) the 

postponement period specified by the 

Secretary in an exercise of the authority 

under section 7508A(a) to postpone 

time-sensitive acts by reason of a 

federally declared disaster, qualified 

taxpayers (as defined in section 

7508A(d)(2)) are entitled to a mandatory 

60-day postponement period during 

which the time to perform those timesensitive acts is disregarded in the same 

manner as under section 7508A(a). The 

rules of this paragraph (g)(1) apply with 

respect to a postponement period 

specified by the Secretary under section 

7508A(b), to postpone acts as provided 

in section 7508A(d)(4). Except for the 

acts set forth in paragraph (g)(2) of this 

section, section 7508A(d) does not 

apply to postpone any acts. 

(2) Acts postponed. The timesensitive acts that are postponed for the 

mandatory 60-day postponement period 

are the acts determined to be postponed 

by the Secretary’s exercise of authority 

under section 7508A(a) or (b). In 

addition, in the case of any person 

described in section 7508A(b), the timesensitive acts postponed for the 

mandatory 60-day postponement period 

include those described in section 

7508A(d)(4): 

(i) Making contributions to a qualified 

retirement plan (within the meaning of 

section 4974(c)) under section 219(f)(3), 

404(a)(6), 404(h)(1)(B), or 404(m)(2); 

(ii) Making distributions under 

section 408(d)(4); 

(iii) Recharacterizing contributions 

under section 408A(d)(6); and 

(iv) Making a rollover under section 

402(c), 403(a)(4), 403(b)(8), or 408(d)(3). 

(3) Calculation of mandatory 60-day 

postponement period—(i) In general. 

The mandatory 60-day postponement 

period begins on the earliest incident 

date specified in a disaster declaration 

for a federally declared disaster and 

ends on the date that is 60 days after the 

latest incident date specified in the 

disaster declaration. In accordance with 

section 7508A(d)(5), the mandatory 60- 

day postponement period under section 

7508A(d) runs concurrently with the 

postponement period determined by the 

Secretary in exercising discretion under 

section 7508A(a) or (b) if the period 

determined by the Secretary is equal to 

or longer than 60 days after the latest 

incident date. If the period determined 

by the Secretary in exercising discretion 

under section 7508A(a) or (b) ends prior 

to 60 days after the latest incident date, 

in accordance with section 7508A(d)(5), 

the mandatory 60-day postponement 

period will run concurrently for the 

length of the period determined by the 

Secretary under section 7508A(a) or (b) 

and then continue running in addition 

to the period determined by the 

Secretary under section 7508A(a) or (b). 


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Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Rules and Regulations 31151 

(ii) Limitations on the mandatory 60- 

day postponement period. (A) In no 

event will the mandatory 60-day 

postponement period be calculated to 

exceed one year. 

(B) In the event the Secretary 

determines to postpone time-sensitive 

acts pursuant to a declaration 

establishing a federally declared disaster 

for purposes of section 7508A that does 

not specify an incident date, there is no 

mandatory postponement period under 

section 7508A(d). In such cases, the 

only postponement period will be the 

period determined by the Secretary 

under section 7508A(a) or (b). 

(4) Examples. The rules of this 

paragraph (g) are illustrated by the 

following examples: 

(i) Example (1). Individual A lives in 

a state that experienced severe but 

isolated tornado damage on March 15. 

On March 20, FEMA issued a Federal 

Register Notice announcing a major 

disaster declaration approved by the 

President for the state where Individual 

A lives, describing the incident date for 

the tornado as March 15. Based upon 

that major disaster declaration, the IRS 

published a news release identifying the 

taxpayers (by county) affected by the 

disaster for purposes of section 7508A 

and specifying the time-sensitive acts 

that are postponed and a period of 

postponement from March 15 through 

July 31, pursuant to section 7508A(a). 

The county where Individual A lives 

was included in the news release. Under 

section 7508A(d), the mandatory 60-day 

postponement period that Individual A 

is entitled to begins on March 15 and 

ends 60 days after March 15, on May 14. 

The mandatory postponement period 

applies to the same time-sensitive acts 

and runs concurrently with the relief 

the IRS provided to Individual A under 

section 7508A(a). 

(ii) Example (2). Individual B lives in 

a coastal state which experienced 

harmful effects from a hurricane that 

began to affect the weather in his state 

on August 15 and ceased to be a weather 

factor in his state on August 19. On 

August 22, FEMA issued a Federal 

Register Notice announcing a major 

disaster declaration approved by the 

President, determining that the coastline 

counties in the state, including the 

county where Individual B lives, were 

severely affected and that these counties 

were entitled to both individual 

assistance and public assistance. The 

major disaster declaration specified the 

earliest incident date for the hurricane 

in the state where Individual B lives as 

August 15 and the latest incident date 

as August 19. Based upon that major 

disaster declaration, the IRS published a 

news release identifying the taxpayers 

affected by the disaster for purposes of 

section 7508A and specifying the timesensitive acts that are postponed and a 

period of postponement from August 15 

through December 31, pursuant to 

section 7508A(a). Under section 

7508A(d), the mandatory 60-day 

postponement period that Individual B 

is entitled to begins on August 15 and 

ends 60 days after August 19, on 

October 18. The mandatory 

postponement period applies to the 

same time-sensitive acts and runs 

concurrently with the relief the IRS 

provided to Individual B under section 

7508A(a). 

(iii) Example (3). Individual C lives in 

a county of a state that is experiencing 

ongoing wildfires. On August 14, FEMA 

issued a Federal Register Notice 

announcing an emergency declaration 

approved by the President to make 

public assistance available under the 

Stafford Act to local governments to 

fight the wildfires. This declaration 

specified an earliest incident date of 

August 14 and no latest incident date. 

On August 17, FEMA issued a Federal 

Register Notice announcing a major 

disaster declaration approved by the 

President for the same wildfires 

incident, announcing that the residents 

of the county where Individual C lives 

were eligible to receive individual 

assistance under the Stafford Act. This 

declaration specified August 15 as the 

earliest incident date and described the 

incident period as ongoing. Based upon 

that major disaster declaration, the IRS 

exercised its discretion under section 

7508A(a) to publish a news release 

identifying the taxpayers (by county) 

affected by the wildfires disaster for 

purposes of section 7508A and 

specifying both the time-sensitive acts 

that are postponed and a period of 

postponement from August 15 through 

December 15. Following the initial news 

release, the wildfires disaster remained 

ongoing, with no ending incident date 

specified, for several months. The IRS 

published a second news release 

postponing the time-sensitive acts 

through January 15. FEMA subsequently 

amended the major disaster declaration 

to specify the latest incident date of 

November 19. Because the IRS acted in 

its discretion to provide relief in 

response to the major disaster 

declaration, and not to provide relief in 

response to the emergency declaration, 

the mandatory 60-day postponement 

period that Individual C is entitled to 

under section 7508A(d) begins on 

August 15, the earliest incident date 

specified in the major disaster 

declaration, and ends 60 days after the 

latest incident date of November 19. The 

mandatory postponement period applies 

to the same time-sensitive acts and runs 

concurrently with the relief the IRS 

provided to Individual C under section 

7508A(a), and ends on January 18, 

which is 60 days after the latest incident 

date and three days beyond the 

postponement period specified by the 

IRS under section 7508A(a) in its news 

release. 

(iv) Example (4). Individual D lives in 

the United States, which is experiencing 

a nationwide emergency as a result of its 

residents being exposed to a highly 

infectious and dangerous pandemic 

disease. On March 13, the President 

declared a nationwide emergency under 

section 501(b) of the Stafford Act. The 

pandemic became a federally declared 

disaster for purposes of section 7508A 

on March 13, however, no incident date 

was specified in the President’s 

emergency declaration. Pursuant to the 

President’s March 13 emergency 

declaration, the IRS published several 

notices identifying the taxpayers 

affected by the disaster for purposes of 

section 7508A and specifying the timesensitive acts that are postponed and a 

period of postponement that generally 

ran from April 1 through July 15, 

pursuant to section 7508A(a). Because, 

in this circumstance, the emergency 

declaration pursuant to which the 

notices were published did not specify 

an incident date, there is no mandatory 

postponement period under section 

7508A(d). The only postponement 

period is the period determined by the 

Secretary pursuant to the discretionary 

authority under section 7508A(a). 

(h) Applicability dates—(1) In general. 

Except as provided in paragraph (h)(2) 

of this section, this section applies to 

disasters declared after January 15, 

2009. 

(2) Paragraph (g) of this section. 

Paragraph (g) of this section applies to 

disasters declared on or after December 

21, 2019. 

Douglas W. O’Donnell, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: May 25, 2021. 

Mark J. Mazur, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2021–12311 Filed 6–10–21; 8:45 am] 

BILLING CODE P 


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