The AICPA on Thursday urged Treasury and the IRS to provide broader tax filing and payment relief for taxpayers affected by the ongoing COVID-19 pandemic. In a letter to Treasury Assistant Secretary for Tax Policy David J. Kautter and IRS Commissioner Charles Rettig from Christopher Hesse, CPA, chair of the AICPA Tax Executive Committee, the AICPA requested that all federal income tax returns, information returns, and payments (including installments and estimated payments) originally due between March 3, 2020, and July 15, 2020, be granted additional time to file and pay until July 15, 2020. While noting that Notice 2020-18 and FAQs posted on the IRS website “were both helpful and appreciated,” the AICPA requested further guidance and clarification regarding Notice 2020-18.
Notice 2020-18, which the IRS released last Friday, allows taxpayers to delay tax filing and payments originally due April 15, 2020, until July 15, 2020, and provides interest and penalty relief to federal income tax returns and payments due April 15, 2020. However, as the AICPA notes, the relief does not cover all tax filings and payments affected by the coronavirus pandemic.
Specific areas where the AICPA recommends the IRS take action include:
- Assuring U.S. citizens living abroad and nonresidents that they do not have to file until July 15;
- Providing relief from manual signature requirements;
- Clarifying whether Form 990, Return of Organization Exempt From Income Tax, and Form 990-PF, Return of Private Foundation, with an April 15 due date have had their due dates extended under the notice;
- Providing filing relief for estate and gift tax returns and, if an individual tax return is postponed until July 15, automatically extending the due date for a related gift tax return;
- Tolling the normal statute of limitation during the pandemic and the 90-day period for a Notice of Deficiency if a locality has a shelter-in-place order;
- Confirming that various forms normally filed with a Form 1040, U.S. Individual Income Tax Return, Form 1120, U.S. Corporation Income Tax Return, and Form 1041, U.S. Income Tax Return for Estates and Trusts, are also automatically extended to July 15;
- Providing guidance and filing relief for nonresident alien taxpayers who cannot leave the United States due to the COVID-19 pandemic and whose continued presence in the country will trigger the substantial presence test;
- Confirming that an extension overpayment made on July 15 counts as if it were made for the first quarter (i.e., April 15) and that this payment counts toward any required second quarter estimated tax payments;
- Providing relief for S corporations that must make estimated payments on April 15; and
- Providing payment relief to employers currently assessed penalties under the Patient Protection and Affordable Care Act, P.L. 111-148, as part of the employer mandate under Secs. 4980H(a) and 4980H(b).
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.
— Alistair M. Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is The Tax Adviser’s editor in chief.