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IRS Expands Filing and Payment Deadlines; Extends Time for Performing Certain Actions
(Parker Tax Publishing April 2020)
The IRS expanded the coronavirus-related filing and payment deadline relief previously issued in Notice 2020-18 and Notice 2020-20 by (1) postponing until July 15, 2020, the deadlines for a variety of tax form filings and payment obligations that are due on or after April 1, 2020 and before July 15, 2020; (2) suspending associated interest, additions to tax, and penalties for late filings or late payments until July 15, 2020; (3) providing additional time to perform certain time-sensitive actions during the April 1 to July15 period; (4) postponing due dates with respect to certain government acts; and (5) postponing the application date for tax return preparers to participate in the Annual Filing Season Program. Notice 2020-23.
As a result of the COVID-19 pandemic, the IRS issued Notice 2020-23, which provides that any person with a federal tax payment obligation or a federal tax return or other form obligation specified below, which is due to be performed on or after April 1, 2020, and before July 15, 2020, is automatically granted an extension until July 15, 2020, to either file the return and/or make the payment that would otherwise be due. This relief is automatic and taxpayers do not have to call the IRS or file any extension forms, or send letters or other documents to receive this relief.
(1) Individual income tax payments and return filings on Form 1040, U.S. Individual Income Tax Return, 1040-SR, U.S. Tax Return for Seniors, 1040-NR, U.S. Nonresident Alien Income Tax Return, 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, 1040-PR, Self-Employment Tax Return - Puerto Rico, and 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico);
(2) Calendar year or fiscal year corporate income tax payments and return filings on Form 1120, U.S. Corporation Income Tax Return, 1120-C, U.S. Income Tax Return for Cooperative Associations, 1120-F, U.S. Income Tax Return of a Foreign Corporation, 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation, 1120-H, U.S. Income Tax Return for Homeowners Associations, 1120-L, U.S. Life Insurance Company Income Tax Return, 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons, 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return, 1120-POL, U.S. Income Tax Return for Certain Political Organizations, 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts, 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies, 1120-S, U.S. Income Tax Return for an S Corporation, and 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B);
(3) 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;
(4) Estate and trust income tax payments and return filings on Form 1041, U.S. Income Tax Return for Estates and Trusts, 1041-N, U.S. Income Tax Return for Electing Alaska Native Settlement Trusts, and 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts;
(5) Estate and generation-skipping transfer tax payments and return filings on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, 706 NA, United States Estate (and Generation-Skipping Transfer) Tax Return, 706-A, United States Additional Estate Tax Return, 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts, 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations, 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions, and 706-GS(D-1), Notification of Distribution from a Generation Skipping Trust (including the due date for providing such form to a beneficiary);
(6) Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, filed pursuant to Rev. Proc. 2017-34;
(7) Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent and any supplemental Form 8971, including all requirements contained in Code Sec. 6035(a);
(8) Gift and generation-skipping transfer tax payments and return filings on Form 709, United States 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;
(9) 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 Code Sec. 6166;
(10) 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) of the Code);
(11) 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;
(12) Quarterly estimated income tax payments calculated on or submitted with Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations, 1040-ES, Estimated Tax for Individuals, 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals, 1040-ES (PR), Estimated Federal Tax on Self Employment Income and on Household Employees (Residents of Puerto Rico), 1041-ES, Estimated Income Tax for Estates and Trusts, and 1120-W, Estimated Tax for Corporations;
(13) All schedules, returns, and other forms that are filed as attachments to the forms listed above or are required to be filed by the due date of such forms, including, for example, Schedule H and Schedule SE, as well as Forms 3520, 5471, 5472, 8621, 8858, 8865, and 8938;
(14) Any installment payments under Code Sec. 965(h) due on or after April 1, 2020, and before July 15, 2020; and
(15) Elections that are made or required to be made on a timely filed form listed above (or attachment to such form) will be timely made if filed on the form or attachment, as appropriate, on or before July 15, 2020.
Observation: Affected taxpayers who need additional time beyond July 15, 2020, to file a return should file the appropriate extension form by July 15, 2020, to obtain an extension to file their return. The extension date may not go beyond the original statutory or regulatory extension date. For example, a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, may be filed by July 15, 2020, to extend the time to file an individual income tax return, but that extension will only be to October 15, 2020. That extension does not extend the time to pay federal income tax beyond July 15, 2020.
Postponement of Interest, Penalties, and Additions to Tax
Notice 2020-23 provides that, as a result of the postponement of the due dates discussed above, the period beginning on April 1, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the forms listed above or to make the payments postponed by Notice 2020-23. Interest, penalties, and additions to tax with respect to such postponed obligations will begin to accrue on July 16, 2020.
Relief With Respect to Specified Time-Sensitive Actions
Notice 2020-23 also provides that taxpayers also have until July 15, 2020, to perform any time-sensitive action listed in either Reg. Sec. 301.7508A-1(c)(1)(iv) - (vi) or Rev. Proc. 2018-58, which are otherwise due to be performed on or after April 1, 2020, and before July 15, 2020. This relief includes the time for filing all petitions with the Tax Court, or for review of a decision rendered by the Tax Court, filing a claim for credit or refund of any tax, and bringing suit upon a claim for credit or refund of any tax. The notice does not provide relief for the time period for filing a petition with the Tax Court, or for filing a claim or bringing a suit for credit or refund if that period expired before April 1, 2020.
Postponement of Due Dates with Respect to Certain Government Acts
Due to the COVID-19 emergency, IRS employees, taxpayers, and other persons may be unable to access documents, systems, or other resources necessary to perform certain time-sensitive actions due to office closures or state and local government executive orders restricting activities. The lack of access to those documents, systems, or resources can materially interfere with the IRS's ability to timely administer the Internal Revenue Code. As a result, the IRS said that its employees will require additional time to perform time-sensitive actions and Notice 2020-23 provides the IRS with additional time to perform time sensitive actions described in Reg. Sec. 301.7508A-1(c)(2) with respect to:
(1) persons who are currently under examination (including an investigation to determine liability for an assessable penalty under Code Sec. 6671 through Code Sec. 6725);
(2) persons whose cases are with the Independent Office of Appeals; and
(3) persons who, during the period beginning on or after April 6, 2020 and ending before July 15, 2020, file written documents described in Code Sec. 6501(c)(7) (amended returns) or submit payments with respect to a tax for which the time for assessment would otherwise expire during this period.
With respect to those taxpayers mentioned above, a 30-day postponement is granted for time sensitive IRS actions if the last date for performance of the action is on or after April 6, 2020, and before July 15, 2020. As a result of the postponement of the time to perform time-sensitive IRS actions, the 30-day period following the last date for the performance of time-sensitive IRS actions will be disregarded in determining whether the performance of those actions is timely.
Extension of Time to Participate in the Annual Filing Season Program
Rev. Proc. 2014-42 created a voluntary Annual Filing Season Program to encourage tax return preparers who do not have credentials as practitioners under Treasury Department Circular No. 230 (i.e., Regulations Governing Practice before the Internal Revenue Service) to complete continuing education courses for the purpose of increasing their knowledge of the law relevant to federal tax returns. Tax return preparers who complete the requirements in Rev. Proc. 2014-42 receive an annual Record of Completion. Under Rev. Proc. 2014-42, applications to participate in the Annual Filing Season Program for the 2020 calendar year must be received by April 15, 2020. The 2020 calendar year application deadline is postponed to July 15, 2020.
For a discussion of tax return filing dates and tax payment dates, see Parker Tax ¶250,100 and Parker Tax ¶250,500, respectively. For a discussion of the IRS Voluntary annual Filing Season Program, see Parker Tax ¶271,160.
Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.
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