In response to the ongoing COVID-19 pandemic, the IRS previously issued several notices to provide relief to taxpayers by postponing the due date for filing federal income tax returns and making federal income tax payments from April 15, 2020, to July 15, 2020, and to provide additional relief by postponing certain federal gift and generation-skipping transfer tax return filings and payments.
The IRS recently issued an additional notice, amplifying and updating the previous notices, that provides any person with a federal tax payment obligation or a federal tax return or other form filing obligation (all as specified in the notice) that is due on or after April 1, 2020, and before July 15, 2020, an automatic postponement until July 15, 2020, to pay and/or file. For example, second quarter estimated income tax payments that are due on June 15, 2020, have been automatically postponed to July 15, 2020.
The most recent notice also clarifies that taxpayers who need additional time to file beyond the July 15, 2020, extension may file the appropriate forms to do so. However, the additional extension does not apply to any payment obligations due by July 15, 2020, and the additional extension may not go beyond the original extension date. In other words, an individual taxpayer extending the filing of an income tax return may request an additional extension, but it may not extend beyond the original Oct. 15, 2020, extension date.
The notice also provides that taxpayers will have until July 15, 2020, to perform certain time-sensitive actions that are due to be performed on or after April 1, 2020, and before July 15, 2020.
The list of time-sensitive actions that fall under this notice is comprehensive and beyond the scope of this update. However, some examples of time-sensitive actions include:
- Contributions to individual retirement accounts, Roth IRAs and health savings accounts for the 2019 tax year, usually required to be made by April 15
- The 180-day period during which a taxpayer may defer gain by investing in a qualified opportunity fund
- The 60-day period during which a taxpayer has the ability to elect to roll over gain from sale of qualified small business stock to another qualified small business stock
- The effective date for an entity classification election (Form 8832) that cannot be more than 75 days prior to the date on which the election is filed
- An election to treat certain stock purchases as asset purchases that must be made within a specified period
- The 30-day period during which an 83(b) election must be made
If you have questions about this IRS notice or want further information on it, please contact one of the attorneys in our Tax Planning and Compliance Practice.
