The IRS Expands Tax Relief – Again!

Tax, Business, and Estate Planning Update

The IRS Expands Tax Relief – Again!

On April 9, 2020, the IRS expanded its list of taxpayers who can delay filing tax returns and paying tax until July 15, 2020. Revenue Procedure 2020-23 affects individuals, corporations, partnerships, estates and trusts, and tax exempt and charitable organizations. It also affects transfer taxes (estate, gift, and GST taxes and returns), quarterly estimated taxes, and deferred estate tax payments.

The relief is expanded to cover certain tax returns due (originally or pursuant to a valid extension) between April 1, 2020, and July 15, 2020. The relief also covers associated tax payments due between April 1, 2020, and July 15, 2020. For the specific returns and tax payments available for this relief, see below.

The extension through July 15, 2020, is automatic. No forms or elections are required.

Elections that are made on a return are timely if the election is made on or before July 15, 2020.

If the original due date for filing a specified tax return falls between April 1, 2020, and July 14, 2020, the due date is now July 15, 2020. If the taxpayer previously requested an extension to file a tax return, and if the extended due date falls between April 1, 2020, and July 14, 2020, then the extended due date is now July 15, 2020.

If the original due date for filing a tax return is between April 1, 2020, and July 15, 2020, a taxpayer can still request an otherwise authorized automatic extension of time to file the return. The taxpayer must file this extension request by July 15, 2020. However, the extended due date is still calculated from the original due date of the return and not from July 15, 2020.

For example, Y, an individual, files a Form 1040. Y’s income tax return is originally due on April 15, 2020. Under recently issued IRS Revenue Procedures, Y now has until July 15, 2020, to file her Form 1040. She also has until July 15, 2020, to pay the income tax shown on the 1040. If Y wants to extend the deadline to file her 1040 beyond July 15, 2020, Y must file Form 4868 on or before July 15, 2020. By timely filing Form 4868, Y will have until October 15, 2020, to file her 1040. October 15, 2020, is six months after the original filing deadline (April 15, 2020) for the 1040. There is no automatic extension to pay tax after July 15, 2020.

The relief extends to filing petitions with the Tax Court, filing a claim for credit or refund of any tax, and bringing suit to claim a refund or credit. Taxpayers under audit may also have an additional 30 days to comply with certain requirements if the last day for performance is between April 6, 2020 and July 16, 2020. The application date to participate in the Annual Filing Season Program for certain non-credentialed tax return preparers has been extended to July 15, 2020.

This relief applies to the following filing obligations and tax payment obligations:

1. Individuals – Forms 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, and 1040-SS.
2. Corporations (both calendar year and fiscal year) – Forms 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, and 1120-SF.
3. Partnerships (both calendar and fiscal year) – Forms 1065 and 1066.
4. Estates and Trusts – Forms 1041, 1041-N, and 1041-QFT.
5. Estate and GST – Forms 706 (including a portability return filed pursuant to Rev. Proc. 2017-34), 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D-1).
6. Basis Reporting on Form 8971 and any supplemental Form 8971.
7. Gifts – Gift and GST tax returns and tax payments filed on Form 709 that are due on the date an estate is required to file Form 706 or Form 706-NA. (In Revenue Procedure 2020-20, the deadline to file a form 709 and to pay any gift tax was extended from April 15, 2020, until July 15, 2020.)
8. Section 6166, 6161, and 6163 estate tax payments (principal or interest) and annual recertification requirements under section 6166.
9. Exempt organizations and Excise Taxes – Form 990-T, Form 990-PF, and Form 4720.
10. Quarterly estimated income tax payments submitted with Form 990-W, 1040-ES, 1040-ES, 1040-ES (PR), 1041-ES, and 1120-W.
11. Certain persons who were previously identified as an affected taxpayer under Rev. Proc. 2018-58 and Regulation 301.7508A-1(c)(2), with respect to federally declared disasters, terroristic or military action, and individuals serving in the armed forces.
     

The relief extends to all schedules, returns, and other forms that are filed as attachments to the Forms listed above. This includes, for example, Schedule H, Schedule SE, 3520, 5471, 8621, 8865, and 8938.