On April 9, 2020, the IRS issued Notice 2020-23 (the “Notice”), that clarifies and expands the relief that had previously been provided in Notices 2020-18 and 2020-20. This blog summarizes and explains these extensions. Please refer to my earlier blog dated April 1, 2020, for a discussion of Notice 2020-18 and 2020-20. Many of the issues I discussed in that earlier blog have now been clarified by the Notice.
The Notice expands the earlier relief to additional returns, tax payments and other actions of taxpayers and the government. Generally, relief is expanded to all taxpayers with a “Specified Form” filing or payment deadline falling during the period April 1, 2020 through July 14, 2020. The relief remains essentially the same as under Notice 2020-18: an automatic extension until July 15 to file and pay taxes due during this period.
Section III.A. of the Notice expands the list of “Specified Form” return filings and related income tax payments to additionally include the following forms and payments:
Form 1040-NR and PR.
The family of Form 1120, including Form 1120-F.
Passthrough Forms 1065, 1066, and 1041 (estate and trust income taxes).
The family of Form 706 returns for gifts and generation-skipping transfers.
Form 706 (estate and generation-skipping transfer) filed pursuant to Rev. Proc. 2017-34.
Form 8971, relating to beneficiaries acquiring property from a decedent.
Estate tax payments under elections under sections 6166, 6161, or 6163.
Exempt organization business income tax and other payments and filings on Form 990-T.
Certain excise tax payments relating to public charities and private foundations.
In general, quarterly estimated income tax payments on most estimated tax forms. Thus, any estimated tax payment due on or after April 1, 2020 and before July 15, 2020 (including those due on June 15) may be paid by July 15.
An investment at the election of a taxpayer due to be made during the 180-day period described in IRC sec. 1400Z-2(a)(1)(A) (relating to a qualified opportunity fund).
As before, additional filing extensions beyond July 15 (up to the regular extension date) may be obtained by filing either Form 4868 or 7004, as applicable. The Notice and the simultaneously filed Information Release IR-2020-66 clarify that the related payment extension is up to, but no longer than, July 15, 2020.
In addition, the Notice now expressly clarifies, in section III.B. that the automatic filing extension applies to any schedules, returns and other forms that are filed as attachments to Specified Forms or are required to be filed by the due date of Specified Forms, including Schedules such as H and SE, and Forms 3520, 5471, 5472, 8621, 8858, 8865, and 8938. The same applies to elections to be made on a Specified Form or attachment to a Specified Form. Notably (and as noted in my April 1 blog), Form 3520-A is not on this list, so does not appear to be a Specified Form (it is ordinarily due on March 15 for a calendar year taxpayer).
The Notice further provides that the same extension applies to certain “Specified Time-Sensitive Actions.” This category includes the filing of Tax Court petitions, filing of a petition for review of a Tax Court decision, filing for a claim for credit or refund of any tax, and bringing suit upon a claim for credit or refund of any tax. The refund claim provision applies primarily to refunds for the 2016 calendar tax year. These extensions do not apply, however, if the period for filing otherwise expired before April 1, 2020.
Finally, the Notice grants a 30-day postponement to the IRS of “Time-Sensitive IRS Actions” with respect to certain “Affected Taxpayers.” The Time-Sensitive IRS Actions are those described in Treas. Reg. sec. 301.7508A-1(c)(2), which lists the following acts:
(2) Acts performed by the government. [Paragraph (b) of this section applies to] the following acts performed by the government—Assessing any tax;
Giving or making any notice or demand for the payment of any tax, or with respect to any liability to the United States in respect of any tax;
Collecting by the Secretary, by levy or otherwise, of the amount of any liability in respect of any tax;
Bringing suit by the United States, or any officer on its behalf, in respect of any liability in respect of any tax;
Allowing a credit or refund of any tax; and
Any other act specified in a revenue ruling, revenue procedure, notice, or other guidance published in the Internal Revenue Bulletin (see §601.601(d)(2) of this chapter).
The 30-day postponement is granted if the last date for performance of the action is on or after April 6, 2020 and before July 15, 2020. An Affected Taxpayer for this purpose is one:
That is currently under examination.
With a case with the Independent Office of Appeals.
That files, within the period stated above, amended returns for which the time for assessment would otherwise expire during this period.
As noted, the 30-day postponement works for the benefit of the IRS, which is (even) less efficient than usual due to the restrictions on movement brought on by the COVID-19 pandemic. The Notice provides that there could be further postponements, as appropriate.
The Notice provides some helpful expansion and clarification of Notices 2020-18 and 2020-20. Although it is possible that there could be certain additional relief offered or clarified in areas other than filing and payment, the Notice may represent the extent of the IRS’s largesse in these areas, as tax receipts will be needed to run the Federal government.
Please contact us with any questions.