Astronomers estimate that our solar system includes millions of asteroids occupying a belt between Mars and Jupiter. That’s fine, as long as they mind their own business. But sometimes, they get curious and nose their way out of their belt to check us out. On April 9, NASA’s Center for Near-Earth Object Studies discovered a car-sized chunk of rock they named Asteroid 2024 GJ2 on course to pass through our atmosphere—closer to us than many satellites—just two days later. That’s not a lot of time to get Bruce Willis and Ben Affleck loaded up in a rocket with a nuclear bomb to destroy it and save us all!
Earth isn’t always so lucky. A century ago, a meteor broke up with nuclear force over Russia’s Tunguska Forest, flattening an estimated 80 million trees. Amazingly, no one was killed. And astronomers routinely discover comets and asteroids that could strike with the same apocalyptic force that took out the dinosaurs 66 million years ago.
But what if 2024 GJ2 hadn’t passed harmlessly by? What if it had struck the earth, with the same power that many asteroids bring to flatten an entire city? What would our friends at the IRS have done?!?
It probably won’t surprise you to learn that the doomsday preppers at the IRS have a well-established disaster plan. The Internal Revenue Manual, which is the IRS’s “staff instruction manual,” outlines comprehensive continuity planning requirements for all sorts of emergencies, including “natural disasters, accidents, technological failures, workplace violence, and terrorism.” The goal, in all cases, is “to ensure the continuation of IRS mission essential functions under all circumstances.” And Section 25.16.1, updated just last June, lays out pages of disaster assistance and emergency relief program guidelines.
So, what actually happens if a chunk of space rock takes out Washington or another major city? The plan assumes that the IRS will resume assessing and collecting taxes within 30 days of the strike. They might be authorized to make cash grants to survivors, or buy assets destroyed in the disaster (and even pay off any outstanding bank loans or mortgages). IRS employees could be reassigned to any job “regardless of and without any effect on the current positions or grades of the employee.”
At one point, the Manual even appeared to give delinquent taxpayers a “Get Out of Jail free” card. “On the premise that the collection of delinquent accounts would be most adversely affected, and in many cases would be impossible in a disaster area, the service will concentrate on the collection of current taxes,” it said. Of course, that rule would apply only in the disaster area: “However, in areas where the taxpaying potential is substantially unimpaired, enforced collection of delinquent taxes will be continued.” Ouch!
The tax code gives you plenty of breaks if your own stuff gets taken out from space. You can deduct unreimbursed damage caused by a meteor strike or other sudden, unexpected, or unusual event, so long as Uncle Sam officially designates the strike as a federal disaster. You’ll have to reduce the amount of your loss by $100, then by 10% of your adjusted gross income. Then, you’ll report the remaining amount on Form 4864.
None of us like paying taxes—but you don’t have to wait for an asteroid strike to pay less. The real answer, of course, is planning. And if “continuity planning” is the answer for the IRS, tax planning is the answer for us. So call us before disaster strikes, and see how much you can save!