In its continued response to the coronavirus pandemic, the IRS issued on April 9, 2020, Notice 2020-23, which extends various tax-related deadlines that were not previously extended by IRS Notice 2020-18 and its related Frequently Asked Questions (“FAQs”).
Under Treasury regulations, the Secretary of the Treasury has the authority to postpone the time for performing certain acts under the internal revenue laws for up to one year for taxpayers in federally-declared disaster areas. On March 13, 2020, the president issued an emergency declaration in response to the COVID-19 pandemic, thereby invoking the Treasury Secretary’s authority. To that end, the secretary has determined that any person with a federal tax payment obligation or federal tax return or other form filing obligation on or after April 1, 2020, and before July 15, 2020 is entitled to relief. Notice 2020-23 sets forth the parameters of this relief.
On March 18, 2020, the IRS issued Notice 2020-17 postponing the due date for certain federal tax payments from April 15, 2020 until July 15, 2020. On March 20, 2020, in response to concerns raised by taxpayers and practitioners regarding return filing deadlines, the IRS restated and expanded on that relief in Notice 2020-18, automatically extending income tax filing and income tax payment deadlines from April 15, 2020, to July 15, 2020. Notice 2020-18 superseded Notice 2020-17.
On March 27, 2020, the IRS issued Notice 2020-20, which further expanded the automatic relief provided by postponing certain federal gift (and generation-skipping transfer) tax return filings and payments. Notice 2020-20 is available at https://www.irs.gov/pub/irs-drop/n-20-20.pdf.
While Notices 2020-18 and 2020-20 provided a welcome reprieve from certain tax obligations during the pandemic, questions remained regarding income tax returns due prior to or soon after April 15, other types of returns or forms not specifically listed in the prior notices, and other types of tax due, including excise or estate tax. On April 9, 2020, the IRS addressed these concerns with the issuance of Notice 2020-23, found at https://www.irs.gov/pub/irs-drop/n-20-23.pdf.
Notice 2020-23 expanded the scope of returns, forms, and payments subject to relief. The new deadline for obligations listed below that were due from April 1, 2020 through July 14, 2020 is July 15, 2020:
- Individual income tax payments and return filings on Forms 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, and 1040-SS;
- Calendar year or fiscal year corporate income tax payments and return filings on Forms 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, and 1120-SF;
- Calendar year or fiscal year partnership return filings on Forms 1065 and 1066;
- Estate and trust income tax payments and return filings on Forms 1041, 1041-N, and 1041-QFT;
- Estate and generation-skipping transfer tax payments and return filings on Forms 706, 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D), and 706-GS(D-1);
- Information return regarding beneficiaries acquiring property from a decedent on Form 8971;
- Gift and generation-skipping transfer tax payments and return filings on Form 709 that are due on the date an estate is required to file Form 706 or 706-NA;
- Estate tax payments of principal or interest due as a result of an election made under sections 6166, 6161, or 6163, and annual recertifications under section 6166, of the Internal Revenue Code;
- Exempt organization business income tax and other payments and return filings on Form 990-T;
- Excise tax payments and return filings on Forms 990-PF and 4720;
- Quarterly estimated income tax payments calculated on or submitted with Form 990-W, 1040-ES, 1040-ES (NR), 1040-ES (PR), 1041-ES, and 1120-W;
- All schedules, information returns, and other forms that are filed as attachments to any of the foregoing forms or are required to be filed by the due date of the foregoing forms, including, for example, Schedule H and Schedule SE, as well as Forms 3520, 5471, 5472, 8621, 8858, 8865, and 8938; and
- Installment payments under section 965(h) of the Internal Revenue Code.
The Notice provides that 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 any of the forms or pay any of the payments postponed by the Notice. Interest, penalties, and additions to tax with respect to such postponed filing and payment obligations will begin to accrue on July 16, 2020.
Notice 2020-23 also extends to July 15, 2020 the deadline for taking any “time-sensitive” tax-related actions that otherwise must be taken on or between April 1, 2020 and July 14, 2020. A time-sensitive action includes:
- Actions listed in 26 C.F.R. § 301.7508A-1(c)(1)(iv) – (vi), which include:
- Filing a petition 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;
- Filing suit upon a claim for credit or refund of any tax; and
- Any other act specified in a revenue ruling, revenue procedure, notice, announcement, news release, or other guidance published in the Internal Revenue Bulletin.
- Actions listed under IRS Revenue Procedure 2018-58, including but not limited to:
- Contributions to Individual Retirement Accounts;
- Acts relating to the adoption, election, retention, or change of any accounting method or accounting period; and
- Elections with respect to certain types of carryback periods.
- Any investment at the election of a taxpayer due to be made during the 180-day period described in section 1400Z-2(a)(1)(A) of the Internal Revenue Code.
Notice 2020-23 also provides a 30-day postponement for various time sensitive actions by IRS employees in connection with an IRS audit or appeal if the last date for performance of the action is on or after April 6, 2020 and before July 15, 2020.
IRS News Release IR-2020-66, also issued April 9, 2020, clarifies that the relief provided in Notice 2020-23 applies to estimated tax payments due on June 15, 2020, postponing the deadline for such payment to July 15, 2020. The release also clarifies that claims for refund of income tax paid with respect to returns due on April 15, 2017 (for tax year 2016) is extended to July 15, 2020. IR-2020-66 can be found at https://www.irs.gov/newsroom/irs-extends-more-tax-deadlines-to-cover-individuals-trusts-estates-corporations-and-others.
Finally, on April 10, 2020, the IRS created a new web portal for non-filers to enter information to assist them in receiving economic impact payments pursuant to the CARES Act. The portal allows individuals who did not file their 2018 or 2019 income tax returns because their income fell below the filing threshold, to enter their payment information for receipt of their economic impact payments (which should be $1,200 under such circumstances). The IRS portal is available at https://www.irs.gov/coronavirus/economic-impact-payments.