Expanding on its earlier notices in response to the COVID-19 pandemic, the IRS and Treasury Department said in Notice 2020-23 (Notice) that almost all taxpayers with a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, have until July 15, 2020, to file returns and make payments without penalties or interest. The relief applies to individuals, Americans who live and work abroad, trusts, estates, corporations, tax-exempt organizations and other non-corporate tax filers.
The Notice amplifies Notices 2020-18 and 2020-20 (see Tax Alerts 2020-0728 and 2020-0805).
The Notice also includes extended deadlines for fiscal-year filers, estimated tax payments and schedules required with certain forms. In addition, the Notice extends the deadline for certain Tax Court filings and the time for filing refund claims.
Invocation of Revenue Procedure 2018-58
The most sweeping relief provided in the Notice is the postponement of all “time-sensitive actions” under Revenue Procedure 2018-58. The Notice postpones until July 15, 2020, the hundreds of returns, forms, statements, elections and actions listed in the revenue procedure that would otherwise have deadlines (regular or extended) from April 1, 2020 through July 14, 2020. The relief provided via the incorporation of Revenue Procedure 2018-58 in the Notice supplements (and in most cases duplicates) those forms specifically extended in the Notice to include returns such as Forms 990, 990-EZ, 1041-A, 4466, and 5227.
Payment and filing deadlines specifically enumerated in Notice
Notice 2020-23 specifically extends the payment and filing deadlines for the following forms:
- Individual income tax returns: Form 1040 series (1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR and 1040-SS)
- Estate and trust income tax returns: Form 1041 series (1041, 1041-N and 1041-QFT)
- Calendar-year and fiscal-year partnership returns: Forms 1065 and 1066
- Calendar-year and fiscal-year corporate income tax returns: Form 1120 series (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)
- Estate and generation-skipping transfer tax returns: Form 706 series (706, 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D) and 706-GS(D-1))
- Gift and generation-skipping transfer tax return: Form 709
- Information return regarding beneficiaries acquiring property from a decedent: Form 8971
- Exempt organization tax returns: Form 990-T (unrelated business income tax); Form 990-PF (excise tax payments on investment income); and Form 4720 (other excise tax payments)
In addition, Notice 2020-23 extends until July 15, 2020, the following:
- All schedules, returns, and other forms that are filed as attachments to extended forms
- Elections that are made or required to be made on a timely-filed form that has been extended
- Transition tax installment payments under IRC Section 965(h)
- Estimated quarterly tax payments due from April 1, 2020 through July 14, 2020 (such that second quarter payments are now also due on July 15, 2020, along with first quarter payments)
Taxpayers interested in extending their filing dates beyond July 15, 2020 (e.g., until October 15, 2020) must file an extension form and pay any taxes due by July 15, 2020.
Deadlines for any of the following occurring from April 1, 2020 through July 14, 2020, are also extended to July 15, 2020:
- Filing a petition with the Tax Court
- Appealing a decision by the Tax Court
- Filing a claim for credit or refund of any tax
- Bringing suit for a claim for credit or refund of any tax
IRS actions postponed
According to the Notice, IRS employees may be unable to perform time-sensitive actions due to their inability to access information and IRS systems. As a result, most IRS actions that must be performed from April 6, 2020 through July 14, 2020, are postponed for 30 days. This extension affects taxpayers that are currently under examination, have cases with the Independent Office of Appeals, or are filing amended returns or submitting payments for which time would otherwise expire. The actions postponed include, but are not limited to:
- The assessment of tax
- Making notice of demand for the payment of tax
- The collection of tax (by levy or otherwise)
- Allowing a credit or refund of any tax
The Notice provides that the 30-day extension is subject to further postponement.
With Notice 2020-23, the IRS has extended the deadline to July 15, 2020, of virtually every action required of taxpayers from April 1, 2020 through July 14, 2020. The Notice also extended by 30 days the deadline for time-sensitive IRS actions due to occur from April 6, 2020 through July 14, 2020. Given current projections regarding the length of the COVID-19 pandemic, it is likely the 30-day extension granted to the government will be further extended at some point.
The extensions afforded to taxpayers grant much-needed relief to individuals, businesses and tax-exempt organizations whose efforts at compliance have been significantly impeded by shelter-in-place orders, the lack of live telephone assistance from the IRS and the IRS’s inability to process mail, with all of its service centers now shuttered. While the Notice goes a long way toward easing burdens on taxpayers, further guidance is still needed from the IRS regarding the submission of time-sensitive paper-filed forms, such as Form 4466, which could allow taxpayers to access much-needed sources of liquidity in this challenging time.