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When disaster strikes, taxpayers are already dealing with enough. Rebuilding homes, replacing belongings, and caring for loved ones should take priority over deciphering confusing IRS notices. That’s why the National Taxpayer Advocate applauds Congress for enacting the Disaster Related Extension of Deadlines Act (H.R. 1491) a long-overdue reform that strengthens taxpayer rights, including the right to pay no more than the correct amount of tax, and ensures fairness in IRS collections. On December 26, 2025, the President signed the bill into law, marking a meaningful step forward for taxpayers affected by disasters and a reminder that smart, targeted fixes can make a real difference.
Following a federally declared disaster, the IRS can postpone certain deadlines, giving taxpayers extra time to file returns and make payments. This relief is essential for taxpayers coping with the immendiate and often overwhelming consequences of a disaster. Unfortunately, disaster relief postponements do not apply uniformly across the tax code. While these inconsistencies were rarely intentional, they often led to confusion and sometimes serious consequences for taxpayers who reasonably believed they were doing everything right. The Disaster Related Extension of Deadlines Act fixes two long-standing technical problems that created unnecessary frustration and inequitable consequences for disaster victims.
When the IRS postpones both filing and payment deadlines, some taxpayers understandably choose to file their returns early but wait to pay the balance due until the postponed due date. Unfortunately, prior to the enactment of the Disaster Related Extension of Deadlines Act, the IRS took the position that disaster postponement didn’t affect the deadline for issuing a collection notice demanding payment under IRC § 6303. The result? Taxpayers received collection notices demanding payment and warning of interest and penalties before the postponed payment deadline provided by the disaster relief postponement. For someone already dealing with a disaster, opening a letter that appears to threaten penalties for doing nothing wrong can be both alarming and frustrating.
In 2023 alone, the IRS sent over a million of these notices erroneously informing taxpayers in disaster areas that their tax was due prior to the postponed deadline. Although the IRS later sent follow up explanations with additional notices attempting to explain the situation, the mixed messages only added to the confusion. In 2024, the IRS introduced a disaster coversheet to accompany the notice and demand letters. The mailing now includes the notice and demand with the non-postponed due date and a coversheet with the postponed due date. However, a coversheet saying “you have more time” attached to a notice saying “pay now or else” is hardly comforting. The better solution is also the simpler one: send the notice at the correct time and list the correct due date once.
Mirroring Legislative Recommendation #57 in the National Taxpayer Advocate’s 2026 Purple Book, the Disaster Related Extension of Deadlines Act amends IRC § 6303 to align the deadline for issuing the first notice and demand for payment with the postponed payment deadline for disaster victims.
This change is a clear win for taxpayers, sparing them unnecessary worry and eliminating an unnecessary and confusing notice during an already difficult time.
Another problem was less visible but even more painful for taxpayers who encountered it. Prior to the enactment of this law, disaster relief postponements typically did not change when certain tax payments were considered paid for purposes of the refund statute of limitations. This technical rule created a trap for well-intended taxpayers who relied on disater relief but may have unknowingly lost their right to a refund to which they were otherwise entitled.
In general, taxpayers have three years from the date the return is filed or two years from the date the tax is paid to submit a refund claim. The IRS can only refund amounts that were paid within the three- or two-year period from the date of the refund claim. Prepaid taxes, like withholding and estimated payments, are usually treated as paid on the original due date of the return, often April 15. Taxpayers who file claims for credit or refund within three years from the date the original return was filed will have their credits or refunds limited to the amounts paid within the three-year period before the filing of the claim, plus the period of any extension of time for filing the original return (the “three-year lookback period”).
Here’s the problem: Disaster relief “postponed” the deadline to file a return, but it didn’t “extend” the “deemed paid” date for prepaid taxes. As a result, taxpayers could have filed their refund claims on time, yet the tax code would prohibit the IRS from issuing the refund because the lookback period had quietly expired. So for taxpayers who had already been through a disaster, learning that a legitimate refund could not be paid because of an obscure procedural rule felt like salt in the wound.
Fortunately, mirroring Legislative Recommendation #56 in the 2026 Purple Book, the Disaster Related Extension of Deadlines Act modifies the language in IRC § 7508A to include the disaster-related postponement period in the lookback period calculation, just as the tax code already does for returns filed pursuant to an extension. By including the postponed period in the lookback calculation, the law ensures that timely refund claims result in actual refunds exactly as taxpayers would expect.
The legislation was sponsored by Congressmen Greg Murphy and Jimmy Panetta in the House of Representatives, and companion legislation was sponsored by Senators Rafael Warnock and Thom Tillis in the Senate. Congressman Greg Murphy said:
“Disaster victims endure unimaginable challenges as they work to rebuild their lives. The last thing they should worry about is navigating confusing IRS filing requirements. The Disaster Related Extension of Deadlines Act provides individuals with sufficient time to claim tax refunds or credits while ensuring clear communication from the IRS to prevent unnecessary penalties or interest. I am grateful to Chairman Smith for his leadership on the Ways and Means Committee and the bipartisan support the bill received on the House floor.”
The Disaster Related Extension of Deadlines Act strengthens taxpayer rights and reaffirms a simple but core principle of tax administration: Every taxpayer has the right to pay only the amount of tax legally due and they should not lose protections or refunds because of technicalities they could not reasonably anticipate.
With unanimous bipartisan support and the President’s signature, this law is now in effect, offering clearer rules, fairer outcomes, and fewer headaches for taxpayers already facing extraordinary circumstances. It is a practical, compassionate reform, and a reminder that tax administration works best when it works for people.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget. NTA Blog posts are generally not updated after publication. Posts are accurate as of the original publication date.