IRS Extends Additional Filing and Payment Deadlines Due to COVID-19

Published on April 14, 2020

On April 9th, 2020, the IRS released Notice 2020-23 which amplifies and expands on the deadline relief provided by Notice 2020-18 and subsequent updates. Prior notices postponed the deadline for certain Federal income tax payments and filings from April 15, 2020, until July 15, 2020, in addition to postponement of Federal and generation-skipping transfer tax return payments and filings. This most recent update expands the relief to additional filings and payments with deadlines that fall between April 1, 2020, and July 15, 2020.

The expanded relief applies to calendar year or fiscal year corporate income tax payments and return filings, calendar year or fiscal year partnership return filings, and individual income tax payments and return filings, among others. This expanded relief also answers a question posed by the prior notices regarding the timing for second quarter estimated payments, which are now automatically postponed to July 15.

The relief provided under this notice is automatic, no forms or documentation must be filed with the IRS. Those taxpayers who need additional time to file beyond July 15th may still file the appropriate extensions by July 15 in order to extend to the original extended filing deadline. For example, a corporation may file Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, by July 15 to receive an extension to October 15, 2020.

This relief applies to all schedules, returns, and other forms that are required to be filed as attachments to returns or by the due date of such forms. This includes Forms 5471, 5472, 8621, and others. The period between April 1, 2020, and ending July 15, 2020, will be disregarded in the calculation of interest and penalties related to these filings, and will begin to accrue again beginning July 16, 2020.

The IRS also released Notice 2020-26 and Revenue Procedure 2020-24 to clarify the filing procedures for Net Operating Loss (NOL) carrybacks allowed under the CARES act. Taxpayers with NOLs arising in a tax year that began during calendar year 2018 and that ended on or before June 30, 2019, are granted a six-month extension of time to file Form 1139, Corporation Application for Tentative Refund, so the form must be filed no later than 18 months after the close of the taxable year. Taxpayers with a NOL from a taxable year beginning before January 1, 2018, and ending after December 31, 2017, can file Form 1139 by July 27, 2020, to claim a refund. The Revenue Procedure also allows taxpayers to waive or reduce the carryback period for NOLs arising in taxable years beginning in 2018 or 2019, though if taxpayers do elect to carryback a NOL they may also elect to exclude certain Section 965 deferred foreign income from the carryback period.

If you have any questions about this, contact the Johnson Lambert team.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.