IRS grants broad coronavirus-related tax relief

By Alistair M. Nevius, J.D.

Taxpayers were granted additional, broad tax filing and payment deadline relief by the IRS late on Thursday, in line with relief requested by the AICPA over the past several weeks amid the coronavirus pandemic. The new relief, issued in Notice 2020-23, applies to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, including individuals, trusts, estates, corporations, and other noncorporate tax filers, and that period will be disregarded by the IRS in calculating any interest, penalty, or addition to tax for failure to file the forms specified in the notice.

Notice 2020-23 grants automatic relief to affected taxpayers — they do not have to file extensions or send documents to the IRS to obtain relief. The relief encompasses forms and their related schedules and attachments and applies to time-sensitive acts listed in Regs. Secs. 301.7508A-1(c)(1)(iv) through (vi) and Rev. Proc. 2018-58 (including, for example, Form 990, Return of Organization Exempt From Income Tax, and Form 5500, Annual Return/Report of Employee Benefit Plan).

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 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, U.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, United States 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, 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;
  • 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)); and
  • 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 acts

Because 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, the notice also gives the IRS additional time to perform certain time-sensitive acts. The IRS is giving itself an extra 30 days to perform these time-sensitive acts if the last date for performance is on or after April 6, 2020, and before July 15, 2020. Affected taxpayers 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.

The IRS earlier provided filing and payment relief in Notice 2020-18, but that relief had 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. Notice 2020-18 explicitly did not apply to any other type of federal tax or to any federal information returns. Practitioners had noted the narrow focus of the earlier guidance, and the AICPA requested broader relief from Treasury and the IRS several times, including most recently on March 26 and again on April 7 (see prior coverage here).

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page.

For tax-related resources, visit the AICPA’s coronavirus (COVID-19) tax resources page.

— Alistair M. Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is the The Tax Adviser’s editor in chief, tax.

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