On Friday March 20, 2020 the Internal Revenue service published Notice 2020-18 which supersedes previously issued guidance under Notice 2020-17. The Secretary of the Treasury has determined that any person with a Federal income tax payment or a Federal income tax return due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief.
The term “person” includes an individual, a trust, estate, partnership, association, company or corporation (affected Taxpayer). For an Affected Taxpayer, 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. Affected Taxpayers do not have to file Forms 4868 or 7004 (extensions). There is no limitation on the amount of the payment that may be postponed.
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.
Comments: Based on an interpretation of the notice this postponement to July 15, 2020 appears to not include information returns such as Report of Foreign Bank and Financial Accounts (FBAR – FIN CEN 114), United States Gift Tax Return (Form 709), and payroll taxes. Normal filing and extension procedures for these returns should be followed as applicable. Additionally, it would appear that the cap amounts for taxes as indicated in Notice 2020-17 have been lifted.
As a result of the postponement of the due date for filing Federal income tax returns and making Federal income tax payments 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 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.
Comments: Based on an interpretation of the notice it would appear that the rules regarding underpayment of taxes (penalties and interest) still apply for the 2019 tax year, and are merely suspended from further accrual during the 90 day postponement period.
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