The IRS Extends Filing and Payment Obligations for Most Taxpayers and Performance of Certain Taxpayer Time-Sensitive Actions Until July 15, 2020, and Extends the Time for Performance of Certain Time-Sensitive IRS Actions by 30 Days

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Seyfarth Synopsis: On April 9, 2020, the Secretary of the U.S. Department of Treasury (the “Secretary”) and the Internal Revenue Service (the “IRS”) issued Notice 2020-23 (the “Notice”), which extends the deadline for performance of a long list of actions until July 15, 2020. Most notably, the Notice extends (1) the due date for essentially all tax returns and tax payments due on or after April 1, 2020, and before July 15, 2020 (the “Covered Period”) until July 15, 2020, (2) the time for taxpayers to perform “specified time-sensitive actions” due to be performed during the Covered Period until July 15, 2020, and (3) the time for the IRS to perform certain time-sensitive actions (including actions related to the assessment and collection of taxes and allowing credits and refunds) whose last day for performance is on or after April 6, 2020, and before July 15, 2020 by 30 days.

Following issuance by the President of the United States of an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the U.S. Treasury Department and the IRS issued the Notice, which supplements previous guidance addressing taxpayer deadlines and provides, among other things, an automatic postponement of certain due dates for filing tax returns and paying taxes and an automatic extension of the time to perform certain time-sensitive actions by taxpayers or the IRS.

Extension of Time for Filing and Payments

The Notice provides that the due date for filing the following federal tax returns (including all schedules, returns, and other forms that are filed as attachments thereto or required to be filed by the same due date) and for paying the following federal taxes during the Covered Period is automatically postponed until July 15, 2020:

• Individual income tax payments and return filings, including:
  • Form 1040, U.S. Individual Income Tax Return,
  • 1040-NR, U.S. Nonresident Alien Income Tax Return (including 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents),
• Calendar year or fiscal year corporate income tax payments and return filing, including:
  • Form 1120, U.S. Corporation Income Tax Return,
  • 1120-F, U.S. Income Tax Return of a Foreign Corporation,
  • 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation,
  • 1120-POL, U.S. Income Tax Return for Certain Political Organizations,
  • 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts,
  • 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies,
  • 1120-S, U.S. Income Tax Return for an S Corporation, and
  • 1120-SF, U.S. Income Tax Return for Settlement Funds (under Section 468B).
• Calendar year or fiscal year partnership return filings, including:
  • Form 1065, U.S. Return of Partnership Income, and
  • Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.
• Estate and trust income tax payments and return filings, including Form 1041, U.S. Income Tax Return for Estates and Trusts.
• Estate and generation-skipping transfer tax payments and return filings, including:
  • Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return,
  • 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return,
  • 706-A, United States Additional Estate Tax Return,
  • 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts,
  • 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations,
  • 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions,
  • 706-GS(D-1), Notification of Distribution from a Generation Skipping Trust (including the due date for providing such form to a beneficiary),
  • Gift and generation-skipping transfer tax payments and return filings on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return that are due on the date an estate is required to file Form 706 or Form 706-NA.
  • 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 Internal Revenue Code of 1986 (the “Code”).
• Installment payments under section 965(h) of the Code.
• Exempt organization business income tax and other payments and return filings on Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e) of the Code).
• Excise tax payments on investment income and return filings on Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation, and excise tax payments and return filings on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Code.
• Quarterly estimated income tax payments calculated on or submitted with, among others:
  • Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations,
  • 1040-ES, Estimated Tax for Individuals,
  • 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals,
  • 1041-ES, Estimated Income Tax for Estates and Trusts, and
  • 1120-W, Estimated Tax for Corporations.

This relief is automatic and taxpayers do not have to call the IRS, file any extension forms, or send letters or other documents. Any additional extension that a taxpayer may obtain beyond July 15, 2020 is subject to the original statutory or regulatory extension date.

Elections that are made or required to be made on such a timely filed tax return (or attachment thereto) will be timely made if filed on such tax return or attachment on or before July 15, 2020.

Finally, the Covered Period will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the applicable tax returns or to pay the applicable taxes postponed by the Notice. Interest, penalties, and additions to tax with respect to such postponed tax returns and tax payments will begin to accrue on July 16, 2020.

Extension of Time for Performance of Specified Time-Sensitive Actions

The Notice further provides that any of the following actions that are due to be performed during the Covered Period do not need to be performed until July 15, 2020:

• Filing a petition with the Tax Court, or for review of a decision rendered by the Tax Court,
• Filing a claim for credit or refund of any tax, and
• Bringing suit upon a claim for credit or refund of any tax.

The Notice also extends the deadline for taxpayers who (1) sold real estate before March 13, 2020 in a transaction structured as a tax-deferred exchange under Code section 1031 (a “Section 1031 Exchange”), to identify replacement property (which normally must be completed within 45 days of the sale) or to purchase replacement property (which normally must be completed within 180 days of the sale) if the identification or purchase were due to be performed during the Covered Period, (2) purchased real estate before March 13, 2020 in a transaction structured as a Section 1031 Exchange to identify relinquished property (which normally must be completed within 45 days of the purchase) or to sell relinquished property (which normally must be completed within 180 days of the purchase) if the identification or sale were due to be performed during the Covered Period, and (3) sold property with eligible gain to reinvest cash equal to the eligible gain by purchasing an interest in a qualified opportunity fund (which nomally must be completed, generally speaking, within 180-days of the sale). You can read more about these extensions in our alert here.

Postponement of IRS Deadlines

The Notice also provides the IRS with a 30-day postponement to perform the following actions if the last date for their performance is on or after April 6, 2020, and before July 15, 2020:

• 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.

Consequently, the 30-day period following the last date for the performance of any of the actions specified above will be disregarded in determining whether the performance of those actions is timely.