Tax Payments, Tax Return Filing and Other Tax Actions Deadline Extensions

April 14, 2020 - On April 9, 2020, the Internal Revenue Service (“IRS”) issued Notice 2020-23 (the “Notice”), which automatically postpones to July 15, 2020 the deadlines of certain federal tax filings, tax payments and other actions for which the tax law provides deadlines.  The Notice substantially expands previous guidance provided by the IRS, including Notice 2020-18, which was the subject of our March 25 e-alert, and Notice 2020-20.  Generally, Notice 2020-18 and Notice 2020-20 postponed to July 15, 2020 the deadline for 2019 income and gift tax return filings, 2019 income, gift and generation skipping transfer tax payments and the first quarter 2020 estimated income tax payments that would otherwise have been due on April 15. 

The new Notice postpones to July 15, 2020 the deadline for many federal tax filings and payments if the original or validly extended due date would have otherwise fallen between April 1 and July 14, 2020 (the “Applicable Period”).  Items subject to the extension include:

• individual, corporate, partnership, and trust and estate income tax returns, estate tax returns, gift tax returns and certain tax returns applicable to exempt organizations (the “Specified Tax Returns”);
• schedules, returns, and other forms that are filed as attachments to the Specified Tax Returns;
• elections that are made on a Specified Tax Return (or attachment thereof) or that are specified in Revenue Procedure 2018-58 (described below);
• extension forms;
• income, self-employment, gift, estate, generation-skipping and certain excise tax payments;
• certain information returns described in Revenue Procedure 2018-58;
• filing petitions with the Tax Court, filing a claim for a credit or refund of tax, and suing for a credit or refund of tax;
• second quarter estimated tax payments for calendar year taxpayers which otherwise normally would be due on June 15; and
• installment payments of the transition tax under Section 965 of the Internal Revenue Code that applied to U.S. shareholders who owned stock in controlled foreign corporations prior to the enactment of the Tax Cuts and Jobs Act of 2017;

Items that were due in March (or earlier), or that are due on or after July 15, 2020, are not eligible for the extension under the Notice.  The Notice is applicable to both calendar and fiscal year taxpayers.  The relief granted is automatic; taxpayers are not required to file an application for this extension with the IRS.  The IRS will waive any interest and penalties incurred during the Applicable Period on taxes or filings covered by the Notice.

The Notice also postpones until July 15 the deadline for actions listed in Revenue Procedure 2018-58 that otherwise are required to be performed before the end of the Applicable Period.  The list is extensive.  It includes certain acts relating to tax elections such as changes to accounting methods or periods; entity classification (“check-the-box”) elections; Section 338 and Section 336(e) elections; and certain S corporation elections.  Revenue Procedure 2018-58 also includes actions other than tax filings and elections that have to be completed within a certain time period in order to obtain a desired tax treatment, including identifying and purchasing replacement property in tax-deferred like-kind exchanges, rolling over gain from sale of small business corporation stock under Section 1045 and making qualified disclaimers for estate and gift tax purposes.  The Notice extends the 180-day deadline for investing capital gains in qualified opportunity zones.  With respect to taxpayers who are currently subject to an audit, have submitted certain amended returns or whose cases are with the Independent Office of Appeals, the Notice also provides a 30-day extension for certain government actions otherwise required to be taken between April 6, 2020 and July 14, 2020, such as assessing a tax, issuing a notice or demand for payment, allowing a credit or refund, and filing a suit in respect of a tax liability.

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