On April 1, 2025, the U.S. House of Representatives passed H.R. 1491, known as the "Disaster Related Extension of Deadlines Act". On December 11, 2025 the Senate by unanimous consent approved the House bill without amendment and the bill was transmitted to the President for his signature.

For tax practitioners, this legislation addresses two persistent statutory misalignments regarding federally declared disasters: the interaction between filing postponements and the refund lookback period, and the premature issuance of collection notices. The bill amends the Internal Revenue Code (IRC) to ensure that disaster relief provisions under IRC § 7508A function in parity with standard filing extensions.

Addressing the Refund Lookback Period Gap

Under current law, a significant trap exists for taxpayers filing under disaster relief provisions. While IRC § 7508A allows the Secretary to disregard a period of up to one year for filing returns (a postponement), this postponement is not statutorily defined as an "extension" for purposes of the limitation on credits or refunds.

This distinction is critical regarding IRC § 6511(b)(2)(A). This section limits the amount of a credit or refund to the portion of tax paid within the period immediately preceding the filing of the claim, equal to three years plus the period of any extension of time for filing the return. Because a § 7508A postponement is not currently treated as an extension, the "lookback period" does not expand. Consequently, amounts paid via withholding or estimated taxes (deemed paid on the original April 15 deadline) may fall outside the recognizable refund window if a return is filed during the disaster postponement period but after the three-year anniversary of the original due date.

The Statutory Fix: New IRC § 7508A(f)

Section 2(a) of H.R. 1491 remedies this by amending IRC § 7508A to add a new subsection (f), titled "Application to Limitation on Credit or Refund". The text of the new provision is explicit:

"For purposes of section 6511(b)(2)(A), any period disregarded under this section with respect to the time prescribed for filing any return of tax shall be treated as an extension of time for filing such return".

By statutorily reclassifying the disregarded period as an extension for § 6511 purposes, the bill ensures the lookback period captures payments that would otherwise be time-barred, providing disaster victims the same refund rights as taxpayers utilizing standard extensions.

Effective Date for Refund Claims Practitioners must note that this amendment applies to claims filed after the date of the enactment of the Act (the date the bill is signed into law by the President).

Correction to Collection Notice Procedures

The second prong of the bill addresses administrative friction regarding notice and demand for payment. Under current IRC § 6303(a), the IRS is required to issue a notice and demand within 60 days of assessment. However, IRC § 6303(b) generally prohibits demanding payment prior to the last date prescribed for payment.

Current IRS automated systems often fail to account for the disaster-related extension of payment deadlines, resulting in the issuance of premature demand letters to taxpayers who are technically compliant under disaster relief provisions.

The Statutory Fix: Amending IRC § 6303(b)

Section 2(b) of the Act restructures IRC § 6303(b). It redesignates the existing provision as paragraph (1) and adds a new paragraph (2), titled "Postponement by Reason of Disaster, Significant Fire, or Terroristic or Military Actions".

The new statute mandates that for the purposes of determining the timing of notices:

"the last date prescribed for payment of any tax shall be determined after taking into account any period disregarded under section 7508A".

This provision forces the alignment of the statutory "last date prescribed for payment" with the postponed deadlines granted under § 7508A, effectively barring the IRS from issuing premature notices during the relief period.

Effective Date for Collection Notices The amendments to IRC § 6303 apply to notices issued after the date of the enactment of the Act.

Conclusion

H.R. 1491 represents a technical correction to synchronize the mechanical operation of disaster relief with the statutes of limitation and collection. Under current law, a disaster postponement acts like a pause button for late-filing penalties but fails to pause the clock for the refund statute of limitations—creating a scenario where a taxpayer can be timely for filing but late for their refund. This legislation effectively rewires the statute so that when the clock stops for the deadline, it legally stops for the refund limitation period as well.

Prepared with assistance from NotebookLM.