IRS Amplifies Tax Relief

IRS Notice 2020-23

The Internal Revenue Service (“IRS”) issued Notice 2020-23 which amplifies the relief provided in Notice 2020-18, and Notice 2020-20, giving additional relief to affected taxpayers, postponing due dates with respect to certain government acts and postponing the application date to participate in the Annual Filing Season Program.

Affected Taxpayer

For purposes of the relief, the IRS defined an Affected Taxpayer as any person with a Federal tax payment obligation (“Specified Payment”), or a Federal tax return or other form filing obligation (“Specified Form”), as specified below, which is due to be performed on or after April 1, 2020, and before July 15, 2020. The Specified Payments and Specified Forms are as follows:

  • Individual income tax payments and return filings (Forms 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, and 1040-SS; including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico);
  • Corporate income tax payments and return filings (Forms 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, and 1120-SF);
  • Partnership return filings (Form 1065 and Form 1066);
  • Estate and trust income tax payments and return filings (Forms 1041, 1041-N, and 1041-QFT);
  • Estate and generation-skipping transfer tax payments and return filings (Forms 706, 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D), and 706-GS(D-1));
  • Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent and any supplemental Form 8971;
  • Gift and generation-skipping transfer tax payments and return filings (Form 709);
  • Estate tax payments of principal or interest due as a result of an election made under Sections 6166, 6161, or 6163 and annual recertification requirements under Section 6166 of the US Code;
  • Exempt organization business income tax and other payments and return filings Form 990-T;
  • Excise tax payments on investment income and return filings (Form 990-PF and Form 4720);
  • Quarterly estimated income tax payments (Forms 1040-ES, 1040-ES (NR), 1040-ES (PR), 1041-ES, 1120-W, and 990-PF);

Postponement of Due Dates

For an Affected Taxpayer, the due date for filing Specified Forms and making Specified Payments is automatically postponed to July 15, 2020. As this relief is automatic, taxpayers do not have to call the IRS or file any extension forms before such date. Affected Taxpayers who need additional time to file can file the appropriate extension form by July 15, 2020. However, the extension date may not go beyond the original statutory or regulatory extension date. This relief includes, not just the filing of Specified Forms, but also, all 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. Also, any installment payment under Section 965(h) of the US Code due on or after April 1, 2020, and before July 15, 2020 is included within the relief.

Extensions will not extend the time to pay federal income tax beyond July 15, 2020. For the period beginning on April 1, 2020, and ending on July 15, 2020, no interest, penalty, or addition to tax will be imposed for failure to file or to pay specified filings and payments postponed by this notice. Accordingly, interest, penalties, and additions to tax will begin to accrue on July 16, 2020.

Specified Time-Sensitive Actions – Relief

The relief provided in Notice 2020-23 gives Affected Taxpayers until July 15, 2020, to perform all Specified Time Sensitive Actions, that are due to be performed on or after April 1, 2020, and before July 15, 2020, such as:

  • Filing petitions with Tax Court
  • Review of decision rendered by Tax Court
  • Filing a claim for credit or refund of any tax
  • Bringing suit upon a claim for credit or refund of any tax

Postponement of Due Dates – Government Acts

The notice also provides the IRS with additional time to perform the time-sensitive actions described in Section 301.7508A-1(c)(2) of the US Code. A 30-day postponement is granted for Time Sensitive IRS Actions if the last date for performance of the action is on or after April 6, 2020, and before July 15, 2020.

Extension of Time to Participate in the Annual Filing Season Program

Deadline to submit applications for the voluntary Annual Filing Season Program to encourage tax return preparers who do not have credentials as practitioners under Treasury Department Circular No. 230 is postponed to July 15, 2020.

IR 2020-70

Scheduling or Rescheduling Payments

For taxpayers looking to reschedule or schedule their federal tax payments, the IRS offers two payment options where payments can be scheduled up to 365 days in advance. These two options are:

  • Electronic Federal Tax Payments System (EFTPS) – this option is free. Here, taxpayers can schedule their estimated and other federal tax payments up to 365 days in advance.
  • Debit, credit card or digital wallet can be scheduled through a payment processor up to 365 days in advance. This option requires payment of a fee.

Additional Electronic Payment Options

Bank Account (Direct pay) – There is an option to pay for free with your bank account using Direct Pay, where taxpayers can schedule a payment up to 30 days in advance. Payments for the July 15 due date can be scheduled beginning June 15. Scheduled payments need to be cancelled at least two days in advance.

Estimated Payments

Estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15. Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. There are 2 free electronic payment options, where taxpayers can schedule their estimated federal tax payments up to 30 days in advance, with Direct Pay or up to 365 days in advance, with the EFTPS.