IRS Issues Guidance Extending Tax Payment Deadlines

UPDATE: Notice 2020-18 (March 23, 2020)

Postponing Federal Income Tax Filing and an Uncapped Amount of Federal Income Tax Payments (Superseding Notice 2020-17)

On March, 20, 2020, the IRS issued Notice 2020-18 (the “Notice”), superseding and expanding the relief provided in Notice 2020-17 (below). The Notice provides that the due date for filing Federal income tax returns and making Federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020 for any “Affected Taxpayer.” An Affected Taxpayer is any person with a Federal income tax payment or a Federal income tax return due April 15, 2020. The term “person” includes an individual, a trust, estate, partnership, association, company or corporation, as provided in section 7701(a)(1) of the Code.

There is no limitation on the amount of the payment that may be postponed but the relief provided is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year. No extension is provided in this Notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.

As a result of the postponement, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the Federal income tax returns or to pay the Federal income taxes postponed by this Notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax filings and payments will begin to accrue on July 16, 2020.

The Notice may be found under the “Guidance” section of the IRS’s coronavirus webpage.

UPDATE: Notice 2020-17

The IRS has issued Notice 2020-17 (the “Notice”) yesterday, March 18, 2020, confirming Secretary Mnuchin’s announcement on Tuesday, detailed below.

The Notice provides that any person with a Federal income tax payment due date of April 15, 2020 (“Affected Taxpayer”), can postpone the payment to July 15, 2020, up to an “Applicable Postponed Payment Amount.” The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group (as defined in §1.1502-1 of the Treasury Regulations). For all other Affected Taxpayers, the Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status. For example, the Applicable Postponed Payment Amount is the same for a single individual and for married individuals filing a joint return. In both instances, the Applicable Postponed Payment Amount is up to $1,000,000.

The relief provided in the Notice is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year. No extension is provided in the Notice for the payments or deposits of any other type of Federal tax, or for the filing of any tax return or information return.

As a result of the postponement of the due date for making Federal income tax payments up to the Applicable Postponed Payment Amount from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to pay the Federal income taxes postponed by the Notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax payment will begin to accrue on July 16, 2020. In addition, interest, penalties, and additions to tax will accrue, without any suspension or deferral, on the amount of any Federal income tax payments in excess of the Applicable Postponed Payment Amount due but not paid by an Affected Taxpayer on April 15, 2020.