IRS Bolsters Taxpayer Relief by Extending 300 Tax Filing, Payment and Administrative Deadlines

On April 9, 2020, the Internal Revenue Service (IRS) issued Notice 2020-23, extending significant tax deadlines for individuals, for-profit and non-profit businesses, trusts, and estates. Notice 2020-23 enhanced the assistance provided in prior IRS Notices 2020-17, 2020-18, and 2020-20, resulting in deferral of an additional three hundred tax filing, payment, and administrative deadlines.

In our client alerts published March 19 and 20, available here and here, we discussed IRS notices that extended the timing for both filing and paying taxes (including first quarter estimated tax payments for individuals) due April 15, 2020, to July 15, 2020. The IRS subsequently issued Notice 2020-20, which extended the relief described above to taxpayers with US federal gift tax or generation-skipping transfer (GST) tax obligations otherwise due by April 15, 2020. As a result, the due date for filing IRS Form 709 (United States Gift (and Generation-Skipping Transfer) Tax Return) and paying any resulting taxes due April 15, 2020, was automatically postponed to July 15, 2020, without the need to file for an extension. The prior guidance did not address or provide for a delay for other payment or filing obligations, including second-quarter estimated tax payments due on June 15, 2020.

Notice 2020-23 automatically expands the relief measures discussed above to cover additional returns, tax payments, and other actions. The extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, with respect to the categories of tax returns identified in the notice. This includes individuals, trusts, estates, corporations, and other non-corporate tax filers. The notice also suspends associated interest, additions to tax, and penalties for late filing or late payment until July 15, 2020.

The filing obligations and payment obligations specifically covered by Notice 2020-23 include the following tax filings:

• Corporations: IRS Form 1120 (domestic “C” corporations), 1120-F (foreign corporations), 1120-REIT (real estate investment trusts), 1120-RIC (regulated investment companies) and 1120-S (“S” corporations) (normally due April 15 for calendar year taxpayers);
• Partnerships: IRS Form 1065 (normally due March 15 for calendar year taxpayers, so the automatic relief would only be available for certain fiscal year taxpayers);
• Estates: IRS Form 706 (normally due within 9 months of decedent’s death);
• Trusts: IRS Form 1041 (normally due April 15);
• Tax-Exempt Organizations: IRS Form 990 (normally due May 15); and
• Individuals: 2020 second quarter estimated tax payments (normally due June 15) (in addition to 2019 tax return and 2020 first quarter estimated tax payments normally due April 15 as already announced).

The relief granted by Notice 2020-23 is automatic, and affected taxpayers do not need to call the IRS or file any extension forms or send letters or documents to obtain the relief. However, affected taxpayers that need additional time to file a tax return beyond July 15, 2020, may choose to file the appropriate extension form by July 15, 2020 (although the extension date may not go beyond the original statutory or regulatory extension date). Any such extension will not, however, extend the time to pay federal income tax liabilities beyond July 15, 2020.

The relief granted by Notice 2020-23 is not limited to US federal income tax returns, but also applies to certain taxpayers who need to take certain time-sensitive actions (including filing a claim for a refund, filing petitions with the US Tax Court, or bringing a lawsuit for a claim for refund, and taking certain actions involving members of the Armed Services under Revenue Ruling 2018-58). A taxpayer seeking to defer gain by applying the qualified opportunity zone rules may defer the time to make an investment due to be made during the 180-day period described in section 1400Z-2(a)(1)(A) of the Code. If the deadline falls on or after April 1, 2020, and before July 15, 2020, the time is extended to July 15, 2020. Notably, the notice emphasizes that any deadlines that expired before April 1, 2020, are not covered and therefore remain expired.

In addition, the relief extends only to the deadlines specified in Notice 2020-23 and does not extend to all tax deadlines. For example, the relief does not extend to payroll tax deadlines or certain tax reporting deadlines.

To discuss how the extended tax deadlines impact you or your business, contact the tax professionals of Arent Fox LLP.