The Internal Revenue Service and the Treasury Department are extending a number of tax deadlines for individuals, trusts, estates, corporations and others due to the impact of the novel coronavirus.
In Notice 2020-23, they extended more key tax deadlines for both individuals and businesses Last month, the IRS said that taxpayers would generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15. No late-filing penalty, late-payment penalty or interest will be due.
Thursday’s notice expands the relief to more returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers can qualify for the extra time to file and make payments. That means anybody, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.
Individual taxpayers who need extra time to file beyond the July 15 deadline can ask for an extension until Oct. 15, 2020, by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004. An extension to file is not an extension to pay any taxes owed. Taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15, 2020, deadline to avoid additional interest and penalties.
Estimated tax payments
Along with the estimated tax payments for April 15 that were previously extended until July 15, Notice 2020-23 also extends relief to estimated tax payments due June 15, 2020. That means any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.
2016 unclaimed refunds deadline extended to July 15
For 2016 tax returns, the normal April 15 deadline to claim a refund has also been extended to July 15, 2020. The law provides a three-year window of opportunity to claim a refund. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15, 2020, date.
The American Institute of CPAs praised the tax filing and payment extensions.
“Over the last several weeks, we repeated our requests to Treasury and the IRS for extensive tax filing and payment relief. Today’s release of Notice 2020-23 is great news to the thousands of taxpayers and tax professionals who are faced with upcoming deadlines. The seriousness of this global crisis is overwhelming,” said AICPA president and CEO Barry Melancon in a statement. "While the AICPA appreciates the relief announced today, we continue to urge Treasury and IRS to develop a contingency plan for the next phase of relief, should that be needed. As a country, we should not risk anyone’s life to meet tax filing obligations.”
On Tuesday, the AICPA urged Treasury Secretary Steven Mnuchin in a letter to immediately expand the tax-related relief to all types of returns and payments. On March 27, the AICPA sent a letter to Treasury and the IRS asking for all federal income tax, information returns, and payments originally due between March 3, 2020 and July 15, 2020 be given extra time to file and pay until July 15, 2020.
Net operating losses carrybacks extended
The IRS also issued Revenue Procedure 2020-24 Thursday, which provides guidance under Section 172(b)(1) and Section 172(b)(3), as amended by the CARES Act. Section 2303 of the CARES Act amended Section 172 to require taxpayers with net operating losses arising in taxable years beginning in 2018, 2019, and 2020 to carry those NOLs back for the five preceding taxable years, unless the taxpayer elects to waive or reduce the carryback period. The revenue procedure also discusses how taxpayers with NOLs arising in taxable years 2018, 2019, or 2020 can elect to either waive the carryback period for those losses entirely or to exclude from the carryback period for those losses any years in which the taxpayer has an inclusion in income as a result of Section 965(a).
In Notice 2020-26, the IRS also granted a six-month extension of time to file Form 1045 or Form 1139 to do a carryback of a net operating loss that arose in any taxable year that started in calendar year 2018 and ended on or before June 30, 2019. Individuals, trusts and estates would file Form 1045, and corporations would file Form 1139.
COVID relief for partnerships with NOLs On April 8, 2020, the IRS issued Revenue Procedure 2020-23, allowing eligible partnerships to file amended partnership returns using a Form 1065, U.S. Return of Partnership Income, by checking the “Amended Return” box and issuing amended Schedules K-1, Partner’s Share of Income, Deductions, Credits, to each of its partners. Partnerships filing these amended returns should write “FILED PURSUANT TO REV PROC 2020-23” at the top of the amended return.
IRS live telephone assistance is currently unavailable due to the coronavirus, so the IRS is urging taxpayers to use its website, IRS.gov, where tax help is available 24 hours a day.
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