Tax Deadline Relief Broadened to Wide Variety of Taxpayers

The IRS has extended the tax filing and payment deadline to July 15 for a wide variety of taxpayers not covered under previous extensions. The affected taxpayers include individuals, trusts, estates, corporations, and other noncorporate tax filers that had filing or payment deadlines falling on or after April 1, 2020, and before July 15, 2020.

The tax return filing and payment relief announced in March by the IRS applied only to federal income tax returns and payments (including self-employment tax payments) due April 15, 2020, for 2019 tax years, and to estimated income tax payments due April 15, 2020, for 2020 tax years.

The new action significantly broadens the filing and payment deadline relief and grants it automatically, so taxpayers do not have to file extensions or send documents to the IRS to obtain the deadline extensions. The IRS will disregard the period between April 1 and July 15 in calculating any interest, penalty, or addition to tax for failure to file the forms specified in the notice.

It is important to note that the deadline extension does not include Form 941 payroll tax filings due April 30 from employers.

Deadline Extensions

The following are details of the deadline extensions from the Journal of Accountancy:

Estimated taxes: The notice postpones the June 15 deadline for estimated tax payments to July 15.

Unclaimed 2016 refunds: The deadline for filing a 2016 tax return to claim a refund, normally April 15, is extended to July 15. The return must be postmarked by July 15.

Installment payments under Sec. 965(h): Installment payments of the Sec. 965 transition tax due on or after April 1, 2020, and before July 15, 2020, are postponed to July 15, 2020.

American citizens living abroad: Americans who live and work abroad can now wait until July 15, 2020, to file their 2019 federal income tax return and pay any tax due.

Specified forms: Federal tax forms (including all schedules and attachments), deadlines, and payments covered by the relief include:

• • Individual income tax payments and return filings on Form 1040, U.S. Individual Income Tax Return, and other forms in the 1040 series.
  • Calendar year or fiscal year corporate income tax payments and return filings on Form 1120, S. Corporation Income Tax Return, and other forms in the 1120 series.
  • Calendar year or fiscal year partnership return filings on Form 1065, U.S. Return of Partnership Income, and Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.
  • Estate and trust income tax payments and return filings on Form 1041, U.S. Income Tax Return for Estates and Trusts, and other forms in the 1041 series.
  • Estate and generation-skipping transfer tax payments and return filings on Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return, and other forms in the 706 series.
  • Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent, and any supplemental Form 8971.
  • Gift and generation-skipping transfer tax payments and return filings on Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return, that are due on the date an estate is required to file Form 706 or Form 706-NA.
  • Estate tax payments of principal or interest due as a result of an election made under Secs. 6166, 6161, or 6163 and annual recertification requirements under Sec. 6166.
  • Exempt organization business income tax and other payments and return filings on Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e)).
  • Excise tax payments on investment income and return filings on Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation, and excise tax payments and return filings on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code.

Postponement of government actions

In addition to the deadline extensions listed above, the IRS also has given itself an additional 30 days to accomplish certain time-sensitive actions.

Government agencies such as the IRS, like private businesses, have faced unprecedented challenges in getting their work done over the past two months. The COVID-19 pandemic has made it difficult for IRS employees, taxpayers, and others to access documents, systems, or other resources due to office closures or state and local government executive orders restricting activities. Hence, the IRS is giving itself a 30-day extension to perform time-sensitive actions if the last date for performance is on or after April 6, 2020, and before July 15, 2020.

Taxpayers affected by the IRS’s internal 30-day extension include those under examination, those with cases with the Independent Office of Appeals, and those who submit amended returns or submit payments with respect to a tax for which the assessment period would expire on or after April 6, 2020, and before July 15, 2020.

If you have questions about how these deadline extensions may impact you, please contact our advisors.