IRS Further Expands Due Date and Payment Relief
As the nation battles the COVID-19 pandemic, the Treasury Department and the Internal Revenue Service (IRS) have risen to the task of assisting taxpayers suffering from economic hardship and who have seen their lives upended by national social-distancing measures.
We have previously covered IRS Notice 2020-17, which extended tax payment due dates normally due on April 15, 2020, to July 15, 2020. The IRS later expanded on that with IRS Notice 2020-18, which extended filing deadlines to July 15 along with payment deadlines. Following that was IRS Notice 2020-20, extending the filing and payment date for gift tax returns. Now, we can report that the IRS has further expanded relief available to taxpayers.
Expanded Relief to Taxpayers
On April 9, 2020, the IRS released Notice 2020-23, which restates and further expands taxpayer relief outlined in the previous notices. It has made sweeping extensions of time to file and pay for many returns and resolved uncertainty for taxpayers across the board.
Under the notice, all of the below filings and returns that are ordinarily due between April 1, 2020, and July 15, 2020, have been extended until July 15, 2020:
- Filing and payment deadlines for Form 1040 (individuals) and its variations;
- Filing and payment deadlines for Form 1120 (C corporations) and its variations;
- Filing deadlines for Form 1065 (partnerships), if the partnership is on a fiscal year;
- Filing deadlines for Form 1120S (S corporations), if the entity is on a fiscal year;
- Filing and payment deadlines for Form 1041 (estates and trusts) and its variations;
- Filing and payment deadlines for Form 706 (estate transfer tax returns) and its variations;
- Filing and payment deadlines for Form 709 (gift tax returns);
- Filing and payment deadlines for Form 990-T (unrelated business income tax (UBIT) for tax-exempt organizations);
- Payment deadlines for payments due for a 990-PF (private foundation), and
- All quarterly estimate payments for individuals, corporations, estates and trusts, tax-exempt organizations, and nonresident individuals, as long as the payment was ordinarily due between April 1 and July 15, 2020. For calendar-year taxpayers, this means that second-quarter estimates, normally due June 15, 2020, are now extended by this relief.
Taxpayers do not need to file an extension form to take advantage of this relief, though they will need to do so if they cannot file a return before July 15, 2020. In addition, the relief extends to certain forms and schedules that were not included in prior notices, such as:
- Form 3520 (foreign trust transactions)
- Form 5471 (reporting of controlled foreign corporations)
- Form 5472 (transactions with foreign shareholders)
Since the penalties for late-filing these forms can be quite exorbitant, this is a welcome relief to taxpayers who file these forms.
As an extra relief for taxpayers currently engaged in controversies before the IRS or the Tax Court, Notice 2020-23 allows additional time for taxpayers to file petitions with the Tax Court, bringing suit against the IRS, or reviewing decisions by the Tax Court.
We understand that during these times there can be information overload, especially when the world is changing around us on a seemingly daily basis. MRPR stands ready to help you with tax planning, tax filing and obtaining sources of capital or financing.