IRS Addresses Those Items Thought to Have Slipped Through

In late March, the IRS announced that certain taxpayers generally have until July 15, 2020, to file and pay federal income taxes which were originally due on April 15. Since that guidance addressed the imminent and impending April 15 deadline, there were some taxpayers, tax forms, and tax payments that were not covered. Very recently, the IRS issued Notice 2020-23 and has extended this tax compliance relief to additional returns, tax payments, and other actions. As a result, the extension relief now generally applies to all taxpayers (“Affected Taxpayers”) that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020 as described below.

Specified Payments

The previous guidance postponed the payments of individual and corporate income tax payments for the tax year 2019 that were originally due April 15 until July 15, 2020. It also included the quarterly estimated individual and corporate income tax payments for the 2020 tax year that were originally due April 15. Notice 2020-23 extends this relief to any tax payment for Affected Taxpayers due before July 15, 2020; therefore, the tax year 2020 quarterly estimated income tax payments that were otherwise due June 15, 2020 have been extended until July 15, 2020.

Tax-exempt Organizations

The extended relief applies to many forms and tax payments made by tax-exempt organizations, including:

  • Form 990-series annual information returns or notices (Forms 990, 990-EZ, 990-PF, 990-BL, 990-N (e-postcard))
  • Forms 8871 and 8872 (applicable to political organizations)
  • Form 5227 (split-interest trust information return)
  • Form 990-T, Exempt Organization Business Income Tax Return
  • Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations
  • Form 4720, Return of Certain Excise Taxes
  • Form 8976, Notice of Intent to Operate under Section 501(c)(4)
  • Quarterly estimated income tax payments submitted with Form 990-W

Postponement of Time-Sensitive Actions

While much of the Notice 2020-23 relief applies to specific compliance filings and payment due dates, the IRS notice also extends relief to many “time-sensitive actions” that can be postponed due to a federally declared disaster, which is the situation with the COVID-19 pandemic. Two of the more significant time-sensitive actions include the 45-day identification and 180-day exchange periods with respect to like-kind exchanges and the election to invest in a qualified opportunity fund (“QOF”) provided the taxpayer invests in a QOF during the 180-day period beginning on the date of the sale or exchange giving rise to the gain. Under the new guidance taxpayers have until July 15, 2020 to satisfy the like-kind exchange or QOF requirements if the statutory periods ended between April 1 and July 14.

IRS Notice 2020-23 is beneficial to certain taxpayers although paying attention to dates is important. Please call your BST tax advisor with any questions.