The IRS deferred the federal income tax filing deadline of April 15, 2020 for all taxpayers because of the coronavirus in Notice 2020-18 (“Notice”). The Notice and Q&A available on the IRS website detail the filing and payment relief. In a related March 21, 2020 news release, I.R. 2020-58, the IRS announced the due date to July 15, 2020 for filing the income tax returns, and for the tax payments regardless of the amount. A taxpayer may file an income tax return extension not later than July 15, 2020 to extend the due date further. Penalties or interest will not be assessed during the interim deferral period.
Pursuant to the Notice and Q&A, the extended filing and payment deadline applies to any taxpayer with the April 15, 2020 due date, including a fiscal year taxpayer. Corporate taxpayers that made certain foreign deductible payments and are subject to the base erosion and anti-abuse tax (“BEAT”) under section 59A of the Internal Revenue Code of 1986, as amended, may defer filing Form 8991 otherwise due by April 15, 2020 under the Notice. Likewise, the extension in the Notice applies to exempt organizations with a fiscal year ending on November 30 and which are required to file Form 990-T and pay unrelated business income tax (“UBIT”). However, relief in the Notice applies only to federal income taxes. Furthermore, a taxpayer may extend the filing deadline further by filing IRS Forms 4868 or 7004, as appropriate, but penalties, interest and additions to tax for failure to pay would begin to accrue on July 16, 2020.
On March 25, 2020, the IRS issued another new release, I.R. 2020-59, suspending all tax payments pursuant to installment agreements or offers in compromise (“OIC”) due between April 1, 2020 and July 15, 2020. The IRS also suspended tax collection activities and deferred due dates for filing delinquent returns or submitting earned income tax credit (“EITC”) or wage verification documentation. In addition, the IRS deferred until July 15, 2020 a deadline to submit additional supporting documentation for an OIC. Likewise, the IRS also announced it would not pursue litigation the statute of limitations for which does not expire in 2020, deny certain tax credits, close an OIC request or default an OIC for delinquent taxpayers before July 15, 2020.
Taxpayers currently under IRS examination, or contesting or seeking to defer a tax liability should consult with their tax advisor regarding the benefits of deferring tax payments and compliance with the extended filing and payment deadlines.