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IRS provides further filing and payment extensions due to COVID-19

published in McAfee & Taft LINC | April 15, 2020

On April 9, 2020, the Internal Revenue Service provided additional extensions to deadlines for various tax matters. I.R.C. Section 7508A provides that if a taxpayer has been impacted by a federally declared disaster, as determined by the Secretary of the Treasury, then the Secretary may specify a certain limited period of up to one year in which certain tax obligations and deadlines can be delayed or disregarded. Accordingly, the Secretary of the Treasury has determined that any individual, trust, estate, partnership, association, company or corporation with a federal tax payment obligation specified below, or a federal tax return or other form filing obligation specified below, which is due to be performed (originally or pursuant to a valid extension) on or after April 1, 2020 and before July 15, 2020, is eligible for certain relief as provided below.

Notice 2020-23 is an amplification of Notice 2020-18 (issued March 20, 2020), which postponed the due date from April 15, 2020, until July 15, 2020, for filing certain federal income tax returns and making federal income tax payments, and Notice 2020-20 (issued March 27, 2020), which postponed certain federal gift and generation-skipping transfer tax return filings and payments. Generally, Notice 2020-23 expands this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including Americans who live and work abroad, can now wait until July 15th to file their 2019 federal income tax return and pay any tax due. See IR-2020-66.

Specifically, the filing and payment obligations that are covered and therefore delayed are as follows:

  • Individual income tax payments and return filings
    • Includes Forms 1040, 1040-SR, 1040 NR, 1040-NR-EZ, 1040-PR, 1040-SS
  • Calendar year or fiscal year corporate income tax payments and return filings
    • Includes Forms 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, 1120-SF
  • Calendar year or fiscal year partnership return filings
    • Includes Forms 1065, 1066
  • Estate and trust income tax payments and return filings
    • Includes Forms 1041, 1041-N, 1041-QFT
  • Estate and generation-skipping transfer tax payments and return filings
    • Includes Forms 706, 706-NA, 706-A, 706-QDT, 706-GS(T), 706GS(D), 706-GS(D-1)
  • Estate and Generation-Skipping Transfer Tax Return on Form 706 filed pursuant to Revenue Procedure 2017-34
  • Information Regarding Beneficiaries Acquiring Property from a Decedent on Form 8971 and any supplements
  • Gift and generation-skipping transfer tax payments and return filings on Form 709
  • Estate tax payments of principal or interest due as a result of an election made under sections 6166, 6161, or 6163 and annual recertification requirements under section 6166
  • Exempt organization business income tax and other payments and return filings on Form 990-T
  • Excise tax payments on investment income and return filings
    • Includes Forms 990-PF, 4720
  • Quarterly estimated income tax payments
    • Includes Forms 990-W, 1040-ES, 1040-ES(NR), 1040-ES(PR), 1041-ES, 1120-W
    • This postpones the June 15th deadline for estimated tax payments to July 15, 2020.

A person with any of the above filing and payment obligations will automatically have its obligation postponed to July 15, 2020. The relief is automatic and there is no need to file any extensions or request with the IRS. However, if additional time is needed beyond July 15, 2020, then the person must obtain an extension to file, but the extension will not go beyond the original statutory or regulatory extension date. This means that the typical extension deadlines after July 15, 2020, are unchanged and are not extended. Individual taxpayers who need additional time to file beyond the July 15th deadline can request an extension to October 15, 2020, by filing Form 4868. Businesses who need additional time must file Form 7004. An extension to file is not an extension to pay any taxes owed. Taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15, 2020, deadline to avoid additional interest and penalties.

Additional items that are altered, extended, or impacted by the notice include the following:

  • The period from April 1st to July 15th will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the postponed forms or payments specified above. Interest, penalties, and additions to tax with respect to the postponed filings and payments will begin to accrue on July 16, 2020.
  • Any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15th to make that payment, without penalty.
  • Certain specified time-sensitive actions that are due to be performed on or after April 1, 2020, and before July 15, 2020, are also delayed until July 15, 2020. This includes time for filing petitions with the Tax Court, review of a decision rendered by the Tax Court, filing a claim or bringing suit upon a claim for credit or refund of any tax, and an investment at the election of a taxpayer due to be made during the 180-day period described in section 1400Z-2(a)(1)(A).
  • The IRS has been granted additional time to perform time-sensitive actions described in section 301.7508A-1(c)(2), including: assessing any tax, giving or making any notice or demand for the payment of any tax, collections of the amount of any liability in respect of any tax, bringing suit in respect of any liability of any tax, and allowing a credit or refund.
  • There is a 30-day postponement for certain persons and IRS actions if the last date for performance of the action is on or after April 6, 2020, and before July 15, 2020. These include: (i) persons who are currently under IRS examination, (ii) persons whose cases are with the Independent Office of Appeals, and (iii) persons who file written documents described in 6501(c)(7) of the Code or submit payments with respect to tax for which the time for assessment would otherwise expire during the period between April 6, 2020, and before July 15, 2020.