Notice 2020-18 (Superseding Notice 2020-17) Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019-20 Pandemic

In response to the Coronavirus, the Treasury has issued a mandate that will allow an extension for Federal Tax Return Payments by moving the payment deadline from April 15th, 2020 to July 15, 2020. The IRS is encouraging most taxpayers to file by April 15th if they will receive a refund, but the taxpayers that owe Federal Tax Payments (known as “Affected Taxpayers”) are now able to postpone payment to the new deadline of July 15, 2020__________________________________________________

The Notice states “For an Affected Taxpayer, the due date for making Federal income tax payments due April 15, 2020, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020. The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group (as defined in §1.1502-1) or for each “C” Corporation that does not join in filing a consolidated return. For all other Affected Taxpayers, the Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status. For example, the Applicable Postponed Payment Amount is the same for a single individual and for married individuals filing a joint return. In both instances the Applicable Postponed Payment Amount is up to $1,000,000.”_______________________

These payments up to $10 million for corporations within the guidelines, and $1 million for other taxpayers will not run interest or penalties between now and July 15th. However, if the corporations or individuals exceed the time limit for payment, they will run interest and penalties on any amount in excess of the $10 million/$1 million limitations from April 15th.”_____________________________________

All Affected Taxpayers are also considered to be “persons” for tax purposes as well. According to Internal Revenue Code Sec. 7701 (a),  “The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.” This indicates that the as far as the tax payment extension applies, Forms 1040s, 1041s, 1120s and other tax forms included in the above are qualified to receive the payment extensions._____________

Simply put, Affected Taxpayers will automatically avoid interest and penalties on the federal taxes that are paid by July 15.  It should be noted that this relief includes federal estimated tax payments due on April 15, 2020, but that any state payments should be reviewed against individual state guidelines as states set individual procedures at this time.

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As always, seek professional guidance with respect to any tax matter. Kindly contact us if you have any questions.

Tax Filing amidst the Covid-19 Pandemic

March 18, 2020

Below is the text of Notice 2020-17 with respect to the global delay in certain filing deadlines.

If you have any questions, kindly contact us.

 

Part III – Administrative, Procedural, and Miscellaneous

 

Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic

 

Notice 2020-17

 

  1. 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 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.

  1. 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 period of up to one year may be disregarded in determining whether the performance of certain acts is timely under the internal revenue laws.

  • GRANT OF RELIEF

The Secretary has determined that any person with a Federal income tax payment due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer).

For an Affected Taxpayer, the due date for making Federal income tax payments due April 15, 2020, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020.  The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group (as defined in §1.1502-1) or for each C corporation that does not join in filing a consolidated return.  For all other Affected Taxpayers, the Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status.  For example, the Applicable Postponed Payment Amount is the same for a single individual and for married individuals filing a joint return.  In both instances the Applicable Postponed Payment Amount is up to $1,000,000.

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) due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable 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 taxable year.

The Applicable Postponed Payment Amounts described in this section III include, in the aggregate, all payments described in the preceding sentence due on April 15, 2020 for such Affected Taxpayers.

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 tax return or information return.

As a result of the postponement of the due date for making Federal income tax payments up to the Applicable Postponed Payment Amount 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 pay the Federal income taxes postponed by this notice.  Interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020.  In addition, interest, penalties and additions to tax will accrue, without any suspension or deferral, on the amount of any Federal income tax payments in excess of the Applicable Postponed Payment Amount due but not paid by an Affected Taxpayer on April 15, 2020.

Affected Taxpayers subject to penalties or additions to tax despite the relief granted by this section III may seek reasonable cause relief under section 6651 for a failure to pay tax or seek a waiver to a penalty under section 6654 for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable.  Similar relief with respect to estimated tax payments is not available for corporate taxpayers or tax-exempt organizations under section 6655.

 

  1. 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) 317-3400 (not a toll-free call).

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On March 17, 2020, the Secretary of the Treasury announced during a televised White House conference that there is a three-month extension of time to pay for taxes otherwise due by April 15th.

While some news outlets are reporting that this is a fait-accompli, let us be clear that there has been no official declaration from the IRS pertaining to these statements.

Further, we are not at all sure as to what types of taxes or taxpayers are included in the relief. Once we have received a definitive declaration from the IRS, we will post that updated information here.
Meanwhile we continue to service all our clients and work to meet the existing timelines.
Should you have any questions please call us for clarification. Most importantly take care of yourselves and loved ones during this challenging time for our country, and the world.

360 Planning is critical in Every Situation

By Tony De Angelo

Below is a link to a FORBES article giving the sensation that Donald Trump is clearly a clueless dolt with respect to tax planning given the laws that he himself promulgated by not aggressively passing on assets by gift to his heirs.

However, buried way into the article are some references as to why Mr. Trump may not be giving assets, such as a basis step up on his passing or by allowing the passing of assets to his young spouse. (Nor, is there any mention of the term “marital trust” in the article).

Personally, I can think of at least six or seven reasons as to why Mr. Trump (regardless of opinion) may not be gifting assets. One might be a “wait and see” approach as the avoidance of income taxes on appreciated assets may be a consideration. At best, we see through a glass darkly in these situations, and to let unknown facts get in the way of a good story would ruin the aura that written pieces like this are trying to create.

Folks, this is all the more reason why good, 360 degree planning is critical in every situation. This article is just one example of how a limited view can create great difficulty.

There are fine professionals to help in this field. We are one. If we can help, please call.

https://forbes.com/sites/chasewithorn/2019/08/09/donald-trumps-financial-carelessness-could-cost-his-kids-13-billion-in-taxes/?utm source=newsletter&utm medium=email&utm campaign=daily#2236d2a665db