IRS Confirms Extension to File by July 15, 2020

Author

Daniel Mayo, Withum

​In response to the Treasury Secretary’s statements, the IRS today issued Notice 2020-18 to supersede its prior guidance, Notice 2020-17, issued two days earlier.

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The new Notice confirms that the extension from April 15 to July 15 applies to all taxpayers and without any taxable amount limits. Here is what we know:
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1. Type of taxpayer – it applies to all individuals, trusts, estates, C corporations, S corporations reporting entity level tax, and partnerships.
2. Returns – it applies to all Federal income tax returns due April 15, 2020.
   • Taxpayers do not need to file an extension request under Forms 4868 or 7004.
3. Taxes – it applies all Federal income tax payments (including payments of tax on self-employment income) due April 15, 2020, including 2019 income taxes and 2020 estimated income tax payments.
   • There is no limit on the amount of the payments that may be extended.
   • It does not apply to estate or gift taxes.
   • It does not apply to tax payments reportable on Form 965, relating to the repatriation tax of 2017.
4. Interest & Penalties – if the income taxes postponed under the Notice are not paid by July 15, 2020, then interest and penalties on the taxes will begin to accrue on July 16, 2020.
5. Notice 2017-17 is superseded and no longer the position of the IRS.

The Notice is very taxpayer friendly and resolves most if not all of the outstanding questions relating to the extension.

This Notice applies to Federal income taxes only, and not to state taxes. Many of the states are likely to follow this approach, but specific state guidance is required to make that happen.
If you have any questions regarding this notice, please reach out to your Withum tax advisor or contact us here.