IRS Confirms: No April 15 Return Filing Extension
The IRS issued a notice extending tax payment deadlines into the summer for most taxpayers, but the April 15 deadline for filing tax returns remains in place.
The Trump administration has alluded to tax relief of some sort when it comes to deadlines for nearly two weeks, but with Notice 2020-17, 2020-15 IRB 1, taxpayers finally have some certainty about just what they’re getting.
In a March 18 statement, Treasury Secretary Steven Mnuchin defended leaving the April 15 return filing deadline unchanged, noting that many taxpayers will receive a refund, enabling them to take advantage of that refund sooner. The tax relief outlined by the notice is aimed at providing taxpayers who owe taxes with additional time to make those tax payments without incurring interest or penalties, he said.
The notice extends the April 15 tax payment deadlines to July 15, with the extension applying to all taxpayers with federal income tax payments, up to specified thresholds. Individual taxpayers, regardless of filing status, can postpone up to $1 million in federal income tax payments, while corporate taxpayers can postpone up to $10 million in income tax payments. Interest, penalties, or additions to tax will continue to accrue on unpaid taxes above those thresholds.
The relief applies solely to the April 15 deadline for making federal income tax payments for tax year 2019, including self-employment taxes, and to the April 15 deadline for making estimated tax payments for tax year 2020.
The extension does not apply to other types of federal taxes or to the filing of federal tax or information returns, according to the notice.
The notice did little to satisfy the concerns of the American Institute of CPAs, which doubled down on calling for an automatic extension to the April 15 deadline for filing returns.
In a statement, AICPA President and CEO Barry Melancon blasted the lack of an extension for return filing as a failure by Treasury to acknowledge “the real-world difficulties tax practitioners and their clients are experiencing.”
Although taxpayers expecting refunds should indeed file as soon as possible, “it is impossible for every taxpayer and their tax adviser to prepare returns in this environment,” Melancon said. Taxpayers have the option of filing for an extension, but even that process requires taxpayers to supply information and data. Given that burden, Melancon called on Treasury to “act immediately” to extend the April 15 filing deadline.
The AICPA’s Edward Karl noted that historically when disasters have been declared, the IRS paired tax payment relief with filing relief. “It is very surprising that we have not yet seen filing relief given the severity of the coronavirus pandemic’s impact on our nation,” Karl said in the statement.
An Accidental Omission?
The absence of an automatic extension for return filing will come as a disappointment to many taxpayers, but one particularly glaring issue in the notice is that it extends the April 15 deadline only for the year’s first estimated tax payments, observed Edward K. Zollars of Thomas, Zollars & Lynch Ltd.
Under the notice, a taxpayer can now make their first 2020 estimated tax payment July 15. But no relief is offered for the second estimated tax payment that is due June 15.
“So in a practical sense, the second estimate is due before the first,” Zollars told Tax Notes.
The absence of any tax relief for the second estimated tax payment could merely be an oversight, and if that’s the case, Zollars said he expects that the IRS would expand the notice to cover the second payment deadline. “But it catches your eye almost immediately,” he said, adding that it’s “interesting that no one involved in drafting would have recalled that the second estimate was due before July 15.”
The notice invokes the authority given to it via the national emergency over the coronavirus declared by President Trump on March 13. Citing section 7508A, the IRS noted that it has the authority to postpone specific tax administration actions for up to a year.
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