Printer Friendly

Hurricane Andrew relief: CPAs on the front lines.

HURRICANE ANDREW RELIEF:

CPAs ON THE FRONT LINES In the wake of the devastation caused by Hurricane Andrew last September, CPAs, as in past disasters, rallied to help those most afflicted.

At least 49 people in Florida and Louisiana died as a result of the storm, while hundreds of thousands found their lives shattered--including 250,000 left homeless. With so many homes and businesses reduced to splinters, property damage was estimated at over $20 billion in Florida and $1.5 billion in Louisiana--making the storm one of the costliest natural disasters in U.S. history.

The most severe damage occurred in Dade County, Florida, where Miami-area business leaders estimated up to 7,800 small companies were left in danger of going out of business.

Responding to the crisis, the Florida Institute of CPAs coordinated an emergency effort. "A lot of people had nowhere to turn," said Bob Bateson, president of the Florida institute, whose efforts were two-tiered: providing the general public with information and assistance and helping practitioners who were themselves victims.

"The public was very grateful for whatever information they could get," said Bateson. "We heard things like, 'I have a checkbook but my bank is gone.'"

In response, a telephone help line was quickly set up to provide assistance to individuals and businesses in the counties hardest hit and a volunteer network put in place so CPAs could answer financial and tax questions. Local radio stations were sent public service announcements promoting the help hot line.

Pro bono services took a variety of forms. Victims frequently sought advice on reconstructing financial records, calculating loss deductions, filing amended 1991 income tax returns, obtaining replacement credit cards and identification and applying for available federal disaster relief loans.

Many practitioners, however, were themselves displaced by Andrew. One CPA whose office was destroyed "walked through the rubble picking up pans of Rolodexes, computer disks and so on, not even knowing if they were his because there were several CPAs in the same building," said Bateson. "Slowly but surely," he added, "these practitioners were put in contact with others who had offered to share equipment and space."

The recovery process was particularly difficult, Bateson explained, because "the normal links of communication didn't exist. You couldn't pick up a telephone, you couldn't fax, you didn't even know where people were. So practitioners went out and just tried to make direct contact with one another."

The Florida institute also worked with the Federal Emergency Management Administration (FEMA), sending volunteers to 25 FEMA sites to advise victims on matters ranging from aid applications to tax filings. In addition the Florida institute assisted the Internal Revenue Service's district office in getting information on tax relief to hard-pressed victims (see box).

Louisiana's efforts. Similarly, the Society of Louisiana CPAs quickly established a program to enlist the support of local CPAs.

According to AI Surffin, director of communications for the Louisiana society, CPAs were solicited in the hardest-hit parishes. "They answered questions over the phone or made themselves available for pro bono counseling," he said.

A day was designated for volunteering members to provide inperson consultations to hurricane victims and, as in Florida, the society promoted its assistance through public service messages.

The society also planned to cosponsor seminars for CPAs with the Small Business Administration, covering topics such as loan packaging. Seminars also were being planned for victims on tax matters such as casualty loss deductions and involuntary conversions.

"We'd like officials from the/RS and the state tax department to talk about what's available in terms of extensions and other provisions," said Surffin, who noted the seminars are modeled on those the South Carolina Association of CPAs offered in response to Hurricane Hugo in September 1989.

Both Florida and Louisiana beneftted from the experiences of the California Society of CPAs, which provided tax and financial advice to victims of the San Francisco earthquake in 1989 (see "CPAs Help After San Francisco Earthquake," JofA, Feb.90, page 9).

The California society also provided assistance in the wake of last year's riots in Los Angeles and forest fires that have wrought havoc in many parts of the state.

AICPA helps, too. The American Institute of CPAs also took steps to help. A practice guide detailing proper tax and accounting treatment of events resulting from the disaster was prepared and distributed for use by CPAs. The Institute contacted senior/RS employees in Washington to ensure that administrative roadblocks identified by Florida and Louisiana CPAs were quickly addressed.

"The practice guide can be used immediately by CPAs in Florida, Louisiana and elsewhere," said Gerald W. Padwe, AICPA vicepresident-taxation. "Moreover," he added, "it is our hope that the casualty loss rules outlined in the guide will serve as a reference for future relief efforts wherever they are needed."

The Institute also is considering supporting changes in the tax law relating to disaster victims. A bill introduced in the House (HR 5640) would extend to four years (from two) the time available to replace property lost in a presidentially declared disaster. The bill also would exempt from taxation insurance money received for lost personal property that has been replaced.

The private companies practice section of the AICPA division for CPA firms also worked with state societies, coordinating relief for accounting firms in Hurricane Andrew's path.

A helping hand. Commitment to public service is high among CPAs. Last year, an AICPA survey found CPA involvement in public service in an upward trend. Three out of four CPAs said they have been involved in some kind of public service work. Those involved devoted a median of about 49 hours over the past 12 months to these activities.

TAX RELIEF FROM THE IRS

The Internal Revenue Service granted relief to taxpayers in Florida's Dade. Broward and Monroe counties and the Louisiana parish of Terre Bonne who are unable to meet their federal tax obligations because of Hurricane Andrew.

According to the IRS, these taxpayers have until December 15, 1992, to file any federal income tax return or pay any federal tax that would have been due on or after August 24, 1992, and before December 15, 1992.
COPYRIGHT 1992 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Florida, Louisiana
Author:Miller, Stephen H.
Publication:Journal of Accountancy
Date:Nov 1, 1992
Words:1021
Previous Article:Most workers would swap some social security for added medicare benefits.
Next Article:California limits accountants' duty to third parties.
Topics:


Related Articles
Global ReLeaf joins disaster effort.
Simplified disaster-loss rules, backed by AICPA, become law.
The great flood of 1993: CPAs to the rescue.
The FEMA phoenix.
Flirting with disaster.
HELP HURRICANE VICTIMS.
CalCPA, IRS, AICPA: partner to provide disaster tax assistance.
All-out effort aids storm victims.
Katrina's harsh lessons: sometimes there's more to a day's work than you can possibly imagine.
Gulf Opportunity Zone Act of 2005: tax breaks for victims of hurricanes Katrina, Rita and Wilma.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters