Additional Tax Filing Relief from the IRS

By Michael Bodrato

The IRS released yesterday additional tax return filing and payment relief in Notice 2020-23, which 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 non-corporate tax filers. In addition, Notice 2020-23 provides that this period of time will be disregarded by the IRS in calculating any interest, penalty, or additions to tax for failure to file the forms specified in the notice.

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 the 2019 tax year, and to estimated income tax payments due April 15, 2020, for the 2020 tax year. Notice 2020-18 explicitly did not apply to any other type of federal tax or to any federal information returns.

Notice 2020-23 amplifies Notice 2020-18 and Notice 2020-20 (which extended the filing and payment due dates for US Gift Tax and Generation-Skipping Transfer Tax Returns to July 15, 2020), providing additional relief to affected taxpayers and in addition postpones due dates with respect to certain government actions.

Pursuant to the Notice 2020-23, the due date with respect to filing and payment obligations specified in the Notice is postponed. The relief provided is automatic and taxpayers do not have to file extensions or send documents to the IRS to obtain this relief. The relief encompasses the specified forms in the Notice and their related schedules and attachments

Notice 2020-23

Some of the relief provided in Notice 2020-23 includes:

Estimated taxes: The Notice postpones the June 15 deadline for estimated tax payments for individuals and corporations to July 15.

2016 unclaimed refunds: For 2016 tax returns, the normal April 15 deadline to claim a refund has also been extended under the Notice to July 15, 2020. The law provides a three-year window of opportunity to claim a refund. Under the extended due date, the return must be postmarked by July 15, 2020 to claim the refund.

 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.

 US citizens living outside of the US: Under the Notice US citizens who live and work outside of the US can wait until July 15, 2020, to file their 2019 federal income tax return and pay any federal income tax due.

 The Federal tax forms and payments specified by the relief include:

• Individual income tax payments and return filings on Form 1040, 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, S. Corporation Income Tax Return, and other forms in the 1120 series;
• Calendar year or fiscal year partnership return filings on Form 1065, 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, 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));
• 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; and
• 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), 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.

Note that the relief provided by Notice 2020-23, includes those forms listed in Revenue Procedure 2018-58, but not specifically identified in Notice 2020-23. These additional forms include Form 990, Return of Organization Exempt From Income Tax.

Postponement of government acts

The notice also gives the IRS additional time to perform certain time-sensitive acts that have been restricted due to the COVID-19 emergency.  The Notice gives the IRS 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.

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