Treasury Extends Payment and Filing Deadline

Updated: April 13, 2020

The IRS announced on April 9, in Notice 2020-23 (the Notice), that it was expanding the automatic extension of tax filing and payment deadlines for individuals and businesses. Previous announcements provided more limited relief by extending to July 15 the filing and payment deadlines for federal income and gift tax returns and payments due on April 15, 2020. The Notice extends to July 15 the filing and payment deadlines to a broader group of returns and payments, and applies to such returns and payments that are otherwise due at any time on or after April 1, 2020 and before July 15, 2020 (whether pursuant to an original due date or an extension), as described below. This relief is automatic, and includes all schedules, returns, and other forms that are filed as attachments to the specified forms or are required to be filed by the due date of the specified forms. The expanded scope of covered returns and payments includes estate tax returns and Forms 990 for tax-exempt organizations, as well as second quarter estimated tax payments (that are otherwise due on June 15). A complete list of covered returns and payments is set forth in the Notice, which can be accessed here: Notice 2020-23. As a result of these postponements, any interest, penalties or additions to tax for failure to file a return or pay tax due, as specified in the above list, will begin to accrue on July 16, 2020.

The Notice also extends the deadline to July 15, 2020 for other time-sensitive actions, including investing in Qualified Opportunity Zones, satisfying the 45 day identification and 180 day exchange requirements for 1031 exchanges, filing a petition with the Tax Court, filing a claim for any credit or refund, bringing suit upon a claim for credit or refund, and other actions described in Revenue Procedure 2018-58 relating to federally declared disasters.

Finally, the Notice provides the IRS with additional time to perform time-sensitive actions, including assessing, demanding payment of, collecting, bringing suit for, crediting or refunding any tax.

While many states and cities have provided, or are considering, their own forms of relief, such relief may not be comparable to that offered with respect to federal taxes. Care should be taken to comply with all applicable filing and payment dates and deadlines.

Additional IRS Guidance

The IRS has published a series of Q&As on its website (to be updated periodically) offering additional guidance with respect to extensions of filing and payment deadlines. These include:

• The relief granted does apply to BEAT payments and installments of “transition tax” relating to untaxed foreign income of certain foreign corporations.
• The extended due date for 2020 personal income tax returns remains October 15 (with extension requests required to be filed by July 15).
• The deadline for making contributions to an IRA, HSA or Archer MSA for 2019 has been extended until July 15, 2020.

In addition, the IRS announced its “People First Initiative,” pursuant to which various collection actions will be put on hold, and payments may be suspended under existing installment agreements and Offers in Compromise until July 15.