On April 9, 2020, the Treasury released Notice 2020-23, further expanding the tax filing and payment relief previously provided to taxpayers in Notices 2020-18 and Notice 2020-20.
The most discussed portion of Notice 2020-23 may be the postponement of estimated tax payments due on or after April 1, 2020, and before July 15, 2020. However, the Notice also expands the definition of an “affected taxpayer” and postpones certain time-sensitive actions required of taxpayers, giving them the opportunity to minimize short-term cash outflow.
The new filing and/or payment deadline of July 15, 2020, applies to the specified payments and forms provided in the Notice, other forms and schedules filed as attachments, and certain elections required to be made on timely filed forms.
Which Forms and Payments Are Postponed?
- Quarterly estimated tax payments (Forms 990-W, 1040-ES, 1041-ES and 1120-W)
- Individual income tax return and payment (Forms 1040, 1040-NR and various other 1040 series returns)
- Corporate income tax return and payment (Forms 1120, 1120-F, 1120-REIT, 1120-RIC, 1120-S and various other 1120 series returns)
- Partnership tax return (Forms 1065 and 1066)
- Estate and trust income tax return and payment (Forms 1041, 1041-N and 1041-QFT)
- Estate and GST tax return and payment (Forms 706 and various other 706 series returns, Form 8971)
- Gift and GST tax return and payment (Form 709)
- Estate tax payments of principal or interest due as a result of an election under Sections 6166, 6161 or 6163 and annual recertification requirements under Section 6166
- Exempt organization business income tax and payment (Form 990-T)
- Excise tax return and payment (Forms 990-PF and 4720)
Taxpayers that still require an extension beyond the new deadline can file for one before July 15. However, it will not result in an extension beyond the normal extended filing deadline. The extended deadline for calendar year partnerships and S Corporations remains September 15, and October 15 for calendar year individuals and corporations.
Which Time Sensitive Actions Are Postponed?
Taxpayers have until July 15, 2020, to perform certain time-sensitive actions that were due on or after April 1 and before July 15. These include filing a petition with the Tax Court or review of a decision by the Tax Court, filing a claim for refund or bringing suit upon a claim for refund. Additionally, the 264 time-sensitive acts specified in Rev. Proc. 2018-58 otherwise due during this time period qualify for the postponement.
Key examples of time-sensitive acts postponed by the Notice are listed below:
- 180-day period to invest in a Qualified Opportunity Zone
- 45-day identification and 180-day exchange periods under Section 1031
- Form 3115 for non-automatic accounting method changes for fiscal years ending April, May or June
- Contributions to a qualified retirement plan, a simplified employee pension or a SIMPLE IRA
- Elections under Sections 1361 and 1362 related to ESBT, QSST, QSUB and S Corporations
The IRS itself was also granted a 30-day postponement, much more narrowly focused than what taxpayers received, to perform certain time-sensitive actions on their end. It applies only:
- If the IRS’ last day for performance of the action is on or after April 6, 2020, and before July 15, 2020, and
- To taxpayers who are under examination, have cases in the appeals process or are filing amended returns.
While the delay in tax return filings and tax payments often garners the headlines, taxpayers should be aware of the additional time they may now have to perform certain time-sensitive actions. In some cases, these postponements could serve as another opportunity to supplement short-term cash flow needs or allow the taxpayer more time to decide the best course of action moving forward.
Contact Robert Venables at firstname.lastname@example.org or a member of your service team to discuss this topic further.
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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.