Yesterday, I reported that the U.S. Department of the Treasury (“Treasury”) issued Notice 2020-17, extending the due date for payment of federal income taxes from April 15, 2020 to July 15, 2020, because of the impact of the COVID-19 pandemic. After some feedback from the tax community, Treasury has now restated and expanded the relief provided by Notice 2020-17.
In accordance with Notice 2020-18, not only is the due date for payment of federal income taxes extended to July 15, 2020, but the date for filing federal income tax returns originally due on April 15 is now extended to July 15, 2020.
Notice 2020-18 supersedes and expands Notice 2020-17 in many helpful ways:
Payment of Income Tax. As provided in Notice 2020-17, the payment extension date is still July 15, 2020. Except as provided below, the rules outlined in my blog post yesterday still apply.
Payment Deferral Limitations. The deferral limitations ($1 million for individuals and $10 million for C corporations) set forth in Notice 2020-17 (and as outlined in my blog post yesterday) go by the wayside. In accordance with Notice 2020-18, there are no limits on the amounts of income tax otherwise due on April 15, 2020 that may be deferred to July 15, 2020 (without penalty or interest).
Filing Deferral. Notice 2020-18 expands the deferral or extension to include the filing requirement of federal income tax returns otherwise due on April 15, 2020 to July 15, 2020. So, not only may the payment be deferred, the filing of the federal income tax return may also be deferred to July 15, 2020.
The Filing Extension Is Automatic. There is no need to file IRS Form 4868 (individual income tax application for automatic extension) or IRS Form 7004 (business income tax application for automatic extension). The filing due date for federal income tax returns otherwise due on April 15, 2020 is automatically extended to July 15, 2020.
Limit to Income Taxes. Like Notice 2020-17, the relief granted by the Notice 2020-18 is limited to federal income taxes.
Treasury’s issuance of Notice 2020-18 makes a great deal of sense. Now, both the payment and the return filing due date for federal income taxes originally due on April 15, 2020 are extended to July 15, 2020. The room that existed for confusion among taxpayers and tax practitioners about there being the possibility of different filing and payment due dates has been alleviated.
Larry J. Brant
Larry J. Brant is a Shareholder and the Chair of the Tax & Benefits practice group at Foster Garvey, a law firm based out of the Pacific Northwest, with offices in Seattle, Washington; Portland, Oregon; Washington, D.C.; New York, New York, Spokane, Washington; and Beijing, China. Mr. Brant practices in the Portland office. His practice focuses on tax, tax controversy and transactions. Mr. Brant is a past Chair of the Oregon State Bar Taxation Section. He was the long-term Chair of the Oregon Tax Institute, and is currently a member of the Board of Directors of the Portland Tax Forum. Mr. Brant has served as an adjunct professor, teaching corporate taxation, at Northwestern School of Law, Lewis and Clark College. He is an Expert Contributor to Thomson Reuters Checkpoint Catalyst. Mr. Brant is a Fellow in the American College of Tax Counsel. He publishes articles on numerous income tax issues, including Taxation of S Corporations, Reasonable Compensation, Circular 230, Worker Classification, IRC § 1031 Exchanges, Choice of Entity, Entity Tax Classification, and State and Local Taxation. Mr. Brant is a frequent lecturer at local, regional and national tax and business conferences for CPAs and attorneys. He was the 2015 Recipient of the Oregon State Bar Tax Section Award of Merit.
Upcoming Speaking Engagements
- "A Journey Through Subchapter S / A Review of the Not So Obvious & The Many Traps That Exist for the Unwary," New York University 82nd Institute on Federal Taxation (New York)New York, NY, 10.26.23
- "A Journey Through Subchapter S / A Review of the Not So Obvious & The Many Traps That Exist for the Unwary," 2023 OSCPA Northwest Federal Tax ConferenceBeaverton, OR, 11.13.23
- "A Journey Through Subchapter S / A Review of the Not So Obvious & The Many Traps That Exist for the Unwary," New York University 82nd Institute on Federal Taxation (California)Berkeley, CA, 11.16.23