The AICPA is urging the IRS to implement an automated system for processing Sec. 1033 replacement period extension requests for taxpayers affected by federally declared disasters.
“The IRS could leverage such online accounts to streamline many disaster-related administrative tasks and, therefore, reduce the resources needed to respond thereto, including [Sec. 1033] extension requests,” the AICPA’s letter said.
Sec. 1033(h) provides a four-year replacement period for personal residences damaged in a federally declared disaster and a two-year period for business or investment property. Taxpayers may request an extension if the taxpayer has reasonable cause for the delay and submits a request before the replacement period expires.
The AICPA also suggested automatic approval for requests pending over a specified timeframe, such as 30 to 60 days. This recommendation aligns with the IRS Advisory Council's similar suggestion in its November 2024 report. Read more.