Treasury Secretary Extends April 15th Tax Payment Deadline by 90 Days

Treasury Secretary Extends April 15th Tax Payment Deadline by 90 Days

On March 17, 2020, Treasury Secretary Steve Mnuchin announced that the deadline to pay taxes due April 15, 2020, for certain taxpayers would be extended by ninety (90) days until July 15, 2020. On March 18, 2020, the IRS issued Notice 2020-17 that provided an extension until July 15, 2020, for individuals who owe up to $1 million and C Corporations and other consolidated groups who owe up to $10 million (defined in the Notice as “Affected Taxpayers”). Penalties, interest, and other statutory additions would begin to run on July 16, 2020, if payment is not made before then. Taxpayers received this relief after the President declared a national emergency because of the coronavirus. If payments are not made for July 15, 2020, taxpayers would still be able to request abatement of penalties, interest, and other additions for reasonable cause. However, taxpayers should be aware that any request would need to satisfy the applicable statutory requirements.

While the Secretary extended the April 15, 2020 payment deadline, he did not extend the April 15, 2020 deadline to file certain tax returns. This extension also does not impact any applicable state filing deadlines. Any extension by a state would be announced by that state. If taxpayers are unable to meet this deadline, the taxpayer should file for a six-month extension. With this extension, any return would then be due on or before October 15, 2020. Filing for an extension, however, does not extend the time to pay any taxes that would be due either on or before April 15, 2020, or by July 15, 2020, for affected taxpayers who can take advantage of the extension. The Notice also provides that “[n]o extension is provided in this notice for the payment or deposit of any other type of Federal tax, or the filing of any tax return or information return.”

Taxpayers should also be aware that this Notice also extended the deadline for affected taxpayers making estimated tax payments that are due on or before April 15, 2020. This extension applies to the same Affected Taxpayers. While the Treasury Department extended the first estimated payment due on April 15, 2020, until July 15, 2020, for those Affected Taxpayers, the Secretary did not extend the second estimated tax payment due on June 15, 2020. Unless a further extension is still announced, those Affected Taxpayers who make estimated tax payments, should still plan to make this estimated tax payment.

Given the everchanging situation, we will provide any additional updates on additional Notices issued by the Treasury Department and IRS. As a result of the President’s disaster declaration, the Treasury Secretary has the authority under 26 U.S.C. § 7508A and 26 C.F.R. 301.7508A-1 to extend other specified deadlines for up to a year.

At Kennyhertz Perry, we advise our clients, whether they be individuals or businesses, on these tax issues and other issues that arise in this unprecedented and rapidly evolving environment. Our combination of large law firm ability and small firm agility allows us to get our clients sound advice fast.

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Kennyhertz Perry advises clients on a wide range issues related to the unprecedented circumstances arising from the response to COVID-19, including these recent tax developments.

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