Letter to The Honorable George W. Bush

February 28, 2007

The Honorable George W. Bush
President of the United States of America
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President:

As you may be aware, a massive snow and ice storm hit Iowa and other states over this past weekend. The current conditions in Iowa are dire and predictions from the weather service are that another equal size storm will roll into the state today.

The farmers of Iowa are currently facing a March 1 deadline to file their returns without incurring an estimated tax penalty under section 6654(i). However, penalty relief may be provided under section 6654(e)(3) with respect to any underpayment to the extent the Secretary determines that by reason of casualty, disaster, or other unusual circumstances the imposition of such addition to tax would be against equity and good conscience. This morning at my meeting with the Treasury Secretary, I spoke with Secretary Paulson about this urgent matter and I expressed to him that this exception is warranted under the current conditions. I asked him to take immediate steps to assure farmers in Iowa and other states that such relief will be granted. The Internal Revenue Service has just issued a news release informing farmers and fishermen affected by the storms of the filing procedures to follow in order to seek penalty relief. In addition to this, I am seeking your help to expedite a request that is expected to be made by Governor Chet Culver to declare much of Iowa a Presidentially declared disaster area.

As I write you, I understand that Governor Chet Culver is preparing the request and has already declared 60 Iowa counties disaster areas. He has told citizens who remain without power to relocate to one of their areas emergency storm shelters. The Federal Emergency Management Agency has been working with the Iowa Association of Electric Cooperatives on a preliminary damage assessment. More than 200 Iowa National Guard members were activated to distribute power generators to help areas pump water and handle sewage treatment. According to officials, the National Guard also has 28 of its armories on stand-by to serve as emergency shelters. 47 emergency shelters are currently open in the state.

According to the latest statistics provided to me by the utility companies, at the peak of the storm the rural electric cooperatives estimated 100,000-120,000 members were without power and the investor-owned utilities estimated around 200,000 members were without power at the peak of the storm. The utility companies also estimated that approximately 122,000 customers are still without power with many customers expected to be without electricity service for at least three more days and some may be without power for a week or more.

In addition, the Department of Agriculture has agreed to work with Governor Chet Culver and emergency management officials to assist livestock producers in counties most-affected by the weekend winter storm. Livestock producers reported a critical need for generators to power environmental controls and supply water for livestock in the affected counties. Some producers are reporting large-scale livestock death and similar emergency situations.

I believe that the conditions outlined above reflect the conditions envisioned by the statute in providing for an exception to the imposition of the estimated tax penalties. I expect that Secretary Paulson will take appropriate actions and ensure that all necessary steps are taken to make certain that the farmers of Iowa and other similarly effected States are properly alerted to such relief. However, I also would request that you do everything you can to expeditiously approve Governor Chet Culver's request for a declaration of a Presidentially declared disaster area.

Sincerely,

Charles Grassley
Ranking Member

cc: The Honorable Henry M. Paulson, Jr., Secretary of the Treasury
The Honorable Mark W. Everson, Commissioner, Internal Revenue Service
Kevin Brown, Commissioner, Small Business/Self-Employed Division, Internal Revenue Service

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