On April 9, 2020, the IRS issued Notice 2020-23. The Notice provides additional relief to taxpayers through the extension of various filing and payment deadlines. In addition, in certain instances, the Notice provides relief to the IRS to perform certain acts after the normal deadlines.
Filing and Payment Deadlines Extended
Similar to prior Notices issued by the IRS in response to COVID-19, Notice 2020-23 automatically extends several filing and payment deadlines for returns and associated taxes. However, Notice 2020-23 is broader than prior notices in that it applies to more return filings and payment obligations.
If a return or payment obligation falls within the Notice and was due to be performed (originally or pursuant to a valid extension) or paid on after April 1, 2020, and before July 15, 2020, there is an automatic extension until July 15, 2020. Some of the more common filing and payment extensions include:
- Individual income tax payments and return filings on Form 1040, 1040-SR, and 1040-NR;
- Calendar year or fiscal year corporate income tax payments and return filings on Form 1120, 1120-F, and 1120-S;
- Calendar year or fiscal year partnership return filings on Form 1065 and 1066;
- 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 (including those filed pursuant to Rev. Proc. 2017-34);
- For 8971 for information regarding beneficiaries acquiring property from a decedent and any supplemental Form 8971, including all requirements contained in I.R.C. § 6035(a);
- Gift and generation-skipping transfer tax payments and return filings on Form 709 that are due on the date an estate is required to file Form 706;
- Estate tax payments of principal or interest due as a result of an election made under I.R.C. §§ 6166, 6161, or 6163 and annual recertification requirements under I.R.C. § 6166;
- Exempt organization business income tax and other payments and return filings on Form 990-T;
- Excise tax payments on investment income and return filings on Form 990-PF and excise tax payments and return filings on Form 4720;
The above filing and payment extensions are automatic. That is, taxpayers are not required to call the IRS or even file an extension form. If the taxpayer needs additional time beyond July 15, 2020, the taxpayer is advised to file the appropriate extension form prior to or on such date. For example, an individual taxpayer may file a Form 4868 by July 15, 2020, to extend the time to file an individual income tax return (Form 1040). However, the extension will not provide another 6 months as usual—rather, the taxpayer will be permitted until October 15, 2020, to file the return without penalty. As always, any extension of time to file the return does not automatically extend the time to pay the income tax beyond the due date, which in this case is July 15, 2020.
Significantly, the IRS has clarified that the relief applies not only to the specified forms above but also to any schedules, returns, or other forms filed as attachments to such forms or required to be filed by the due date with such forms. These include Forms 3520, 5471, 5742, 8621, 8858, 8865, and 8938.
Tax Court Deadlines, Claims for Refund, and Complaints for Refund
The Notice also provides that taxpayers have until July 15, 2020, to file petitions with the Tax Court, provided the petitions were otherwise due on or after April 1, 2020, and before July 15, 2020. Moreover, taxpayers have until July 15, 2020, to file a claim for refund of tax and to bring a lawsuit against the Government for refund, provided the due dates fell on or after April 1, 2020, and before July 15, 2020. The Notice does not extend relief to any period for any of these events that expired before April 1, 2020.
Postponement of Due Dates With Respect to IRS Acts
The Notice also provides the IRS (i.e., the Government) with relief in certain instances. Specifically, the IRS will have an additional 30-days to perform certain acts if the last date for performance of the act was on or after April 6, 2020, and before July 15, 2020. These acts affect the following taxpayers:
- Persons who are currently under examination (including an investigation to determine liability for an assessable penalty under subchapter B of Chapter 68);
- Persons whose cases are with the Independent Office of Appeals; and
- Persons who, during the period beginning on or after April 6, 2020, and ending before July 15, 2020, file amended returns or submit payments with respect to a tax for which the time for assessment would otherwise expire during this period.
The government acts that are extended include: (1) assessing tax; (2) giving or making any notice or demand for payment of tax; (3) collecting by levy or otherwise the amount of any tax liability; (4) bringing suit by the United States; and (5) allowing a credit or refund of tax.
As a result of the postponement of time, the 30-day period following the last date for the performance of such act will be disregarded in determining whether the performance of the act was timely.
Freeman Law aggressively represents clients in tax litigation at both the state and federal levels. When the stakes are high, clients rely on our experience, knowledge, and talent to help them navigate all levels of the tax dispute lifecycle—from audits and examinations to the courtroom and all levels of appeals. Schedule a consultation or call (214) 984-3000 to discuss your tax needs.