COVID-19 Coronavirus: Important Tax Notices and Updates Taxpayer Relief – Tax Year 2019 – Notice 2020-18

Finally! Some good news for those affected by the current Coronavirus pandemic.  As the COVID-19 virus pandemic continues to spread across the globe, the United States Treasury and Internal Revenue Service are taking measures to provide US Taxpayers with some financial relief.   On March 13^th, 2020, President Trump issued an Emergency Declaration for the nation which allows the Treasury Department and Internal Revenue Service to use their authority under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L 100-707, and Code Section 7508A, to extend filing and payment deadlines and waive penalties and interest. 

On Friday, March 20^th, 2020, the IRS announced that they would be extending the 2019 tax year filing deadline to July 15^th, 2020 for the original filing date of April 15^th, 2020.   Under notice IRS Guidance Notice 2020-18 (which supersedes prior notice 2020-17), all filings and payments for Federal Income tax are extended to July 15^th, 2020.  The prior notice 2020-17 limited payments up to $1,000,000 to defer, however, the $1,000,000 limit has been removed.  Under the 2020-18 notice applies to any individual, a trust, an estate, company or corporation with a federal income tax return or income tax payments due April 15h, 2020. 

Additionally, no interest or penalties will accrue from April 15^th, 2020 to July 15^th, 2020 since the tax payments are now due at the later date.

The extension also applies to 2020 Quarter Extension Tax Payments due April 15^th, 2020. 

The IRS will no longer answer questions about Notice 2020-17.  They have provided updated contact information for any questions about the new Notice 2020-18 at (202) 317-5436. 

Below is a quoted copy directly from the 2020-18 notice for your convenience and reference.  You can also get a copy of the notice by clicking on the links above. 

“Part III – Administrative, Procedural, and Miscellaneous Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic

Notice 2020-18

I. PURPOSE

 On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).” Pursuant to the Emergency Declaration, this notice provides relief under section 7508A(a) of the Internal Revenue Code (Code) for the persons described in section III of this notice that the Secretary of the Treasury has determined to be affected by the COVID-19 emergency. This notice supersedes Notice 2020-17.

II. BACKGROUND

Section 7508A provides the Secretary of the Treasury or his delegate (Secretary) with authority to postpone the time for performing certain acts under the internal revenue laws for a taxpayer determined by the Secretary to be affected by a Federally declared disaster as defined in section 165(i)(5)(A). Pursuant to section 7508A(a), a 2 period of up to one year may be disregarded in determining whether the performance of certain acts is timely under the internal revenue laws.

On March 18, 2020, the Department of the Treasury and the Internal Revenue Service issued Notice 2020-17 providing relief under section 7508A(a) of the Code, which postponed the due date for certain Federal income tax payments from April 15, 2020, until July 15, 2020. This notice restates and expands upon the relief provided in Notice 2020-17.

III. GRANT OF RELIEF

The Secretary of the Treasury has determined that any person with a Federal income tax payment or a Federal income tax return due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer). The term “person” includes an individual, a trust, estate, partnership, association, company or corporation, as provided in section 7701(a)(1) of the Code.

For an Affected Taxpayer, the due date for filing Federal income tax returns and making Federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004. There is no limitation on the amount of the payment that may be postponed.

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of 3 tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.

No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.

As a result of the postponement of the due date for filing Federal income tax returns and making Federal income tax payments from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the Federal income tax returns or to pay the Federal income taxes postponed by this notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax filings and payments will begin to accrue on July 16, 2020.

IV. EFFECT ON OTHER DOCUMENTS

This Notice supersedes Notice 2020-17. Because of the expansion of relief provided in this notice and the fact that Notice 2020-17 is superseded, any phone calls regarding Notice 2020-17 that have not already been returned will not be returned. As noted below, taxpayers with questions regarding the application of this notice should contact (202) 317-5436.

V. DRAFTING INFORMATION

The principal author of this notice is Jennifer Auchterlonie of the Office of Associate Chief Counsel, Procedure and Administration. For further information regarding this notice, you may call (202) 317-5436 (not a toll-free call).”

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This is for informational purposes. The information was prepared by Avidian Wealth Management this information has not been independently verified by a third party.

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