Internal Revenue Service Formalizes Filing and Payment Postponement Announcement

Internal Revenue Service Formalizes Filing and Payment Postponement Announcement

The IRS just issued Notice 2020-18, which formalized the income tax filing AND income tax payment postponement announcement made yesterday by Treasury Secretary Mnuchin.  The announcement cleared up many of the questions that were unanswered yesterday.

The Notice treats any person that has a federal income tax payment or a federal INCOME TAX return due on April 15, 2020 as an “Affected Taxpayer” and therefore is eligible for the relief described below.  The term person includes an individual, trust, estate, partnership or corporation.

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. Extension Forms 4868 and 7004 do NOT need to be filed, and there in NO limitation on the amount of the payment that can be postponed. During the postponement period no penalties or interest will be assessed.

This relief applies to income tax (and self-employment tax) due for 2019 as well as to first quarter estimated tax payments for 2020, both of which would normally be due on April 15, 2020.

The Notice points out that no taxes other than income taxes and self-employment taxes due on April 15, 2020 will be covered by this postponement. Therefore, any GIFT tax, ESTATE tax, TRANSITION tax or other federal tax is still due, as is any other federal information return.

It is also unclear at this point in time if zero balance due gift tax returns need to be extended.

The Notice does not apply to the second quarter 2020 estimated tax payment that will still be due on June 15, 2020.

If you have any questions or would like to set up time to discuss how we can assist you, please reach out to your Citrin Cooperman relationship partner.