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IRS significantly expands tax return filing and payment due date relief

On April 9, 2020, the IRS and Treasury Department issued Notice 2020-23, granting an automatic extension until July 15, 2020, to comply with several federal filing and payment obligations in addition to those already extended (please see our previous tax alert), as well as to perform certain time-sensitive actions. The relief generally applies to all obligations that otherwise would have been due on or after April 1, 2020, and before July 15, 2020, including 2020 second-quarter estimated tax payments. It also extends to both calendar-year and fiscal-year filers.

The notice clarifies “all schedules, returns, and other forms” that must be attached to the returns that are automatically extended are covered (such as Schedules H and SE, and Forms 3520, 5471, 5472, 8621, 8858, 8865 and 8938). This relief includes any installment payments of repatriation tax liabilities due on or after April 1, 2020, and before July 15, 2020. In addition, elections that are made or required to be made on a timely filed covered return are extended as well.

This relief is automatic: affected taxpayers do not have to call the IRS, file extension forms, or send letters or other documents to receive this extension. Taxpayers may continue to file for additional extensions beyond July 15, 2020, but the extension date may not go beyond the original statutory or regulatory extension date. For example, a request for an extension to file an individual tax return may be filed by July 15, 2020, to extend the time to file the return, but that extension will only be to Oct. 15, 2020. It will not extend the time to pay federal income tax beyond July 15, 2020.

Caution: This relief applies to federal obligations only. Each state will have its own deadlines. Please visit our state tax-filing extension matrix to see if your state has extended its deadlines in response to COVID-19.

Tax returns and payments covered by the notice include, but are not limited to:

  • Individual income tax payments and filings on Forms 1040, 1040-SR and 1040-NR,
  • Calendar- or fiscal-year corporate income tax payments and filings on Form 1120, 1120-S, 1120-C, 1120-F, 1120-RIC and 1120-REIT,
  • Calendar- or fiscal-year partnership return filings on Form 1065,
  • Estate and trust income tax payments and return filings on Form 1041,
  • Estate and generation-skipping transfer tax payments and return filings on Form 706,
  • Gift and generation-skipping transfer tax payments and return filings on Form 709,
  • Exempt organization business income tax and other payments and return filings on Form 990-T, and
  • Excise tax payments on investment income and return filings on Form 990-PF.

Time-sensitive taxpayer actions extended include, but are not limited to:

  • Filing Form 8752 by fiscal-year partnerships and S corporations and making any required deferral period deposits,
  • Filing Form 5500 by certain fiscal-year employee benefit plans (calendar-year 2019 plan filings are due without extension on July 31, 2020, and have not been further extended as of this time),
  • The 45-day period to identify replacement property, and 180-day period to execute a like-kind exchange pursuant to Internal Revenue Code section 1031,
  • Any act relating to the adoption, election, retention or change of any accounting method or period, or to the use of an accounting method or period,
  • Filing Form 3115 for consent of a nonautomatic accounting method change,
  • The 180-day period for investing eligible capital gains in a qualified opportunity zone,
  • Filing a petition with the Tax Court, or for review of a decision rendered by the Tax Court,
  • Filing a claim for credit or refund of any tax, and
  • Bringing suit upon a claim or refund of any tax.

This relief is limited to the items specifically provided for by the notice and other official guidance released to date. Any other type of federal tax, return or time-sensitive act has not been extended.

We encourage you to reach out to your Baker Tilly tax advisor to discuss how these extensions may affect your tax situation.

Contact our team

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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.

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