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IRS Officially Extends Time to File To July 15 Because of Coronavirus

March 24, 2020

On March 20, 2020 we posted Trump Extends Time to File To July 15 Because of Coronavirus, where we discussed that Treasury Secretary Steven Mnuchin tweeted Friday that President Trump has directed him to move Tax Day to July 15, giving taxpayers more time to file their taxes in the midst of the coronavirus pandemic. 
 
Now in Notice 2020-18, IRB 2020-15, IRS has made official the March 20 tweet by Treasury Secretary Mnuchin that postpones until July 15, 2020, the filing date for 2019 federal income tax returns and 2020 federal income tax estimates that would otherwise be due on April 15, 2020. The Notice also updates a previous Notice with respect to the amount of tax payment that can be postponed. 

On March 18, 2020, IRS issued Notice 2020-17 which postponed the due date for certain Federal income tax payments from April 15, 2020 until July 15, 2020. See  IRS provides extension for federal income tax payments due April 15. 
On March 20, 2020, Treasury Secretary Steven Mnuchin announced, via a tweet, that he was "moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties." See Tax return filing date moved to July 15. 
IRS Has Now Made Official The March 20 Announcement
By The Treasury Secretary, That Postpones Until
July 15, 2020, The Filing Date For 2019 Federal Income
Tax Returns And 2020 Federal Income Tax Estimates
That Would Otherwise Be Due On April 15, 2020.
Any person with a Federal income tax payment or a Federal income tax return due April 15, 2020 is an “Affected Taxpayer.” The term “person” includes an individual, a trust, estate, partnership, association, company or corporation, as provided in Code Sec. 7701(a)(1).
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 to obtain this relief.
The relief provided 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 tax year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 tax year. 
No extension is provided in the 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.
Notice 2020-17 Put Limits On The Amount Of Tax Payments That Could Be Postponed From April 15 Until July 15.
 
The New Notice Amends That Rule To Provide That There Is No Limitation On The Amount
Of The Payment That May Be Postponed.
The new Notice supersedes Notice 2020-17. Because of the expansion of relief provided in the new Notice and the fact that Notice 2020-17 is superseded, any phone calls to IRS regarding Notice 2020-17 that have not already been returned will not be returned. 
Can't Pay Your Taxes?

Contact the Tax Lawyers at
Marini & Associates, P.A.  
 
for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid
 
 

Read more at: Tax Times blog

Trump Extends Time to File To July 15 Because of Coronavirus

March 20, 2020

Treasury Secretary Steven Mnuchin tweeted Friday that President Trump has directed him to move Tax Day to July 15, giving taxpayers more time to file their taxes in the midst of the coronavirus pandemic.
“At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15,” said Mnuchin. “All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” 

Steven Mnuchin

✔@stevenmnuchin1

At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.

27.3K

10:04 AM - Mar 20, 2020
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Earlier this week, the administration moved the payment deadline to July 15, but groups like the American Institute of CPAs, the National Society of Accountants and the National Conference of CPA Practitioners pointed out that wasn’t going far enough. Many taxpayers and their accountants are dealing with the fallout from the COVID-19 pandemic and don’t have access to all their tax records or offices. A group of senators introduced bipartisan legislation Thursday to push back the tax filing deadline.

Specific details and IRS guidance on the postponed deadlines were not immediately available. 

 

Can't Pay Your Taxes?

Contact the Tax Lawyers at
Marini & Associates, P.A.  
 
for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid
 


 

Read more at: Tax Times blog

IRS Defers Tax Payments Until July 15th!

March 17, 2020

In a press briefing Tuesday morning, March 17, 2020, Treasury Secretary Steven Mnuchin said that individual taxpayers who owe up to a million dollars in federal taxes can defer paying until July 15, while corporations can defer up to $10 million.
“The Reason We’re Doing A Million Dollars Is Because
It Covers A Lot Of Pass-Through And Small Businesses,”
He Noted.

“All you have to do is file your taxes, you’ll automatically not get charged interest and penalties,” he said. “We encourage those Americans who can file their taxes to continue to file on April 15, because for many, you will get tax refunds, and we don’t want you to lose out on those refunds.”

Mnuchin made a point of saying that taxpayers could still file for extension, which would allow them to defer filing and payment until October 15. “We’re not taking that right away,” he said.

No Specific Mention Was Made Of Changing
The Filing Deadline.

“This is disappointing,” said Neil Fishman, president of the National Conference of CPA Practitioners. “From everything that was coming out, we expected they were going to grant a filing extension. But they’re not granting a filing extension, they’re granting a payment extension.”

“This is not helping people with their tax returns,” he continued. “I’ve got clients in a senior facility, and they’re all on lockdown, I was going to go see them this week, but they’re not letting anybody in, not even family. If the person is quarantined, they can’t sign an authorization form. If they owe money, they can’t sign a check.” The promise to waive “all penalties and interest” raised some questions for some tax experts.

“If I don’t file for an extension but pay within next 90-day period, the question is, will they waive the failure to file penalty?” asked Roger Harris, president of Padgett Business Services and a past chair of the IRS Advisory Council.
“They’re waiving all penalties for not paying, but what about for not filing? Some in media are saying he waived both, but that’s not what I heard him say. Does this waiver also apply to the estimated tax payment due on April 15 by some taxpayers.”

Harris said that he believes the reason the government is only talking about extending payments is that it doesn’t put pressure on the states to change their filing dates.

“By Just Extending The Payment Date, It Doesn’t Force States To Consider Changing Their Filing Date,” He Explained.

“They just have to decide if they want to defer payment, penalty and interest free, or not.”

Delaying payment requirements will give businesses and individuals nearly three more months to meet their IRS obligations, potentially lessening cash-flow issues that some businesses are facing as many people stay home and spend less money on dining out, entertainment and transportation.

“This is a commonsense step to afford individual Americans and businesses access to financial resources they need during this time of economic and social disruption,” Senate Finance Committee Chairman Chuck Grassley said in a statement.
Wealthier individuals, ranging from the upper-middle class to the top 1%, could benefit the most from this move because they are more likely to owe the government money and be able to wait until the filing deadline to submit their returns, said John Koskinen, a former IRS commissioner.
Nearly 68 million individuals had already filed their tax returns as of March 6, according to the most recent statistics from the IRS. That’s about 45% of the returns the agency expects to receive this year.
“For a lot of people it makes sense to stick to the original schedule,” said Meredith Tucker, a principal at accounting firm Kaufman Rossin. “Don’t just kick the can down the road if there is no benefit.”

Can't Pay Your Taxes?


Contact the Tax Lawyers at
Marini & Associates, P.A.  
for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid

Read more at: Tax Times blog

Foreign Trust Form 3520-A Filing Date Reminder & Tips To Avoid Penalties

March 16, 2020

The due date for the foreign trust’s information reporting return, the Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner (Under section 6048(b)), is the fifteenth day of the third month following the end of the foreign trust’s taxable year or March 15th for calendar year taxpayers.

An extension of time to file Form 3520-A may be requested by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. 

 
How To Avoid Penalties:
 
1. Form 3520-A

  • File by the fifteenth day of the third month after the end of the trust’s tax year, the due date may be extended by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.

  • Form 7004 must be filed with an Employer Identification Number (EIN) for the foreign trust. Forms 7004 for a foreign trust cannot be processed under an individual’s Social Security Number (SSN). Please obtain an EIN for the foreign trust. 

  • If the foreign trust does not file a Form 3520-A, the U.S. owner of the foreign trust must file a substitute Form 3520-A by completing a Form 3520-A to the best of their ability and attaching it to a timely filed Form 3520, including extensions (see Form 3520 Instructions for more information on filing a substitute Form 3520-A). Do not separately file a duplicate Form 3520-A if you are filing a substitute 3520-A attached to your timely filed Form 3520, with extensions.
 
    2. Form 3520:

  • When completing Form 3520, be sure to check Box 1K on page 1, and enter the form number of the income tax return if an extension was filed.

    If the foreign trust fails to timely file a complete and accurate Form 3520-A, and its U.S. owner also fails to file a complete and accurate substitute Form 3520-A (by attaching a Form 3520-A to its timely filed 3520, including extensions), the U.S. owner is subject to a separate penalty, equal to the greater of $10,000 or 5 percent of the gross value of the portion of the foreign trust's assets treated as owned by the U.S. owner under the grantor trust rules at the close of the taxable year.

  • This penalty is in addition to any applicable penalty of the same amount for the U.S. owner’s failure to timely file a complete and accurate Part II of Form 3520.  See IRC section 6677(a) through (c) and the Instructions for Form 3520 and Form 3520-A.
Need To Contest and IRS Penalty?

 
 Contact the Tax Lawyers at 
Marini & Associates, P.A.   
for a FREE Tax Consultation contact us at:
www.TaxAid.com or www.OVDPLaw.com or
Toll Free at 888-8TaxAid (888) 882-9243
 

Read more at: Tax Times blog

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