Improving the Principal Residence Disaster Relief Provisions

Abstract

In this article, the author proposes a simple statutory solution to an inequity in the disaster relief provisions of the Internal Revenue Code. Using two hypothetical taxpayers, the paper demonstrates that similarly situated disaster-struck taxpayers may not be treated equally. She then analyzes the Service's position in this area, including a discussion of case law in which she focuses on the interactions between sections 1033 and 1034. The author then reviews legislative history to discern Congress's intent when it enacted section 1034. Finally, in her conclusion, the author sets forth a simple statutory amendment to remedy this inequity.

Keywords: disaster relief, residence, tax policy

JEL Classification: H24, K11, K34, R52