Expanded Tax Relief for Tax Filings, Payments and Other Time Sensitive Actions
Last updated April 12, 2020
Last month, due to the COVID-19 emergency, the Department of the Treasury and the Internal Revenue Service “(IRS”) extended the deadlines for taxpayers to file and pay federal income taxes originally due on April 15, 2020 to July 15, 2020. See CSG’s “IRS, New York and New Jersey All Extend Tax Deadlines,” which can be found here.
On April 9, 2020, the IRS released Notice 2020-23 (“Notice”), extending more key tax deadlines for both individuals and businesses. Specifically, the Notice postpones the due dates for “affected taxpayers” with respect to an expanded list of federal tax returns, tax payments, forms, and schedules that are due at any time between between April 1, 2020 and July 15, 2020 (including estimated payments due on June 15). The new postponed due date for those types of filings is July 15, 2020.
The relief applies to individuals, trusts, estates, corporations, and other non-corporate tax filers, and covers the following federal tax forms and payments:
- Individual income tax payments and return filings on IRS Form 1040, U.S. Individual
- Income Tax Return, and other IRS Form 1040-series returns;
- Calendar year or fiscal year corporate income tax payments and return filings on IRS Form 1120, U.S. Corporation Income Tax Return, and other IRS Form 1120-series returns;
- Calendar year or fiscal year partnership return filings on IRS Form 1065, U.S. Return of Partnership Income, and IRS Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return;
- Estate and trust income tax payments and return filings on Form IRS 1041, U.S. Income Tax Return for Estates and Trusts, and other IRS Form 1041-series returns;
- Estate and generation-skipping transfer tax payments and return filings on IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and other IRS Form 706-series returns;
- IRS Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent and any supplemental IRS Form 8971;
- Gift and generation-skipping transfer tax payments and return filings on IRS Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return that are due on the date an estate is required to file IRS Form 706 or IRS Form 706-NA;
- Estate tax payments of principal or interest due as a result of an election made under Sections 6166, 6161, or 6163 of the Internal Revenue Code of 1986 (the “Code”) and annual recertification requirements under Code Section 6166;
- Exempt organization business income tax and other payments and return filings on IRS Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under Section 6033(e) of the Code);
- Excise tax payments on investment income and return filings on IRS 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 IRS Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Code; and
- Quarterly estimated income tax payments calculated on or submitted with IRS Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations, IRS Form 1040-ES, Estimated Tax for Individuals, IRS Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals, IRS Form 1040-ES (PR), Estimated Federal Tax on Self Employment Income and on Household Employees (Residents of Puerto Rico), IRS Form 1041-ES, Estimated Income Tax for Estates and Trusts, and IRS Form 1120-W, Estimated Tax for Corporations.
Time-Sensitive Actions of Taxpayers
Notice 2020-23 also provides relief with respect to certain specified “time-sensitive actions” (“Time-Sensitive Actions”) that the taxpayer is due to perform at any time between April 1, 2020 and July 15, 2020. Taxpayers now have until July 15, 2020 to perform those Time-Sensitive Actions.
The Time-Sensitive Actions to which relief applies are generally those listed in Treas. Reg. Section 301.7508A-1(c)(1)(iv) through (vi) and Rev. Proc. 2018-58, and include the filing of all petitions with the Tax Court, filing a claim for credit or refund of any tax, and brining suit upon a claim for credit or refund of any tax. The list also includes compliance with the 45-day identification period and 180-day exchange period in Section 1031(a)(3) of the Code and Rev. Proc. 2000-37. Therefore, if a taxpayer engaged in a Section 1031 exchange and is subject a 45-day identification period or a 180-day exchange period that expires anytime between April 1, 2020 and July 15, 2020, that taxpayer will now generally have until July 15, 2020 to complete the aforesaid identification or exchange, as applicable.
In addition, the term “Time-Sensitive Action” also includes an investment at the election of a taxpayer of the taxpayer’s capital gains into a Qualified Opportunity Fund (as described in Section 1400Z-2(a)(1)(A) of the Code), to the extent that the taxpayer’s deadline for the reinvestment falls between April 1, 2020 and July 15, 2020.
Time-Sensitive Government Acts
The Notice also postpones the due dates with respect to certain “time-sensitive government acts” such as examinations, cases in Appeals, and filing certain amended returns or submitting payments for which the time for assessment would otherwise expire if the last day for performing such acts falls between April 6, 2020 and July 15, 2020. The extension is for 30 days.
Annual Filing Season Program
Lastly, the Notice postpones the time for tax return preparers to apply to participate in the calendar year 2020 annual filing season program until July 15, 2020.
If Additional Time Needed
Individual taxpayers who need additional time to file beyond the July 15, 2020 deadline may obtain an extension under the normal process by filing the IRS Form 4868 by the July 15, 2020 deadline (but the extension date may not go beyond the original statutory or regulatory extension date). Businesses who need an extension to file must file the IRS Form 7004. Taxpayers requesting an extension beyond the July 15, 2020 deadline should estimate their tax payments and pay any taxes owed by July 15, 2020 to avoid the imposition of interest and penalties.
Notice 2020-23 is welcome relief to the thousands of taxpayers and tax professionals who are faced with upcoming deadlines. If you have any questions regarding the available extensions, contact your CSG advisor.
For additional information pertaining to the coronavirus outbreak, please visit CSG’s COVID-19 Resource Center.
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