Updated: Treasury Secretary Extends April 15th Tax Deadlines 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 certain 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.  On March 20, 2020, the IRS issued Notice 2020-18 that superseded the prior notice and extended all April 15, 2020 deadlines, including the tax return filing deadlines, until July 15, 2020.  Furthermore, the extension applies to all taxpayers regardless of how much a taxpayer may owe.  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 deadlines, these extensions do not impact any applicable state filing deadlines.  Any extension by a state would be announced by that state.  Kansas and Missouri have both now extended their deadlines from April 15, 2020 until July 15, 2020 to match the new federal deadlines.  Other states have also extended their deadlines. If taxpayers are unable to meet these new deadlines 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 on or before July 15, 2020.

Taxpayers should also be aware that the Secretary of the Treasury also extended the deadline for making estimated tax payments that are due on or before April 15, 2020 until July 15, 2020.  While the Treasury Department extended the first estimated payment due on April 15, 2020, the Secretary did not extend the second estimated tax payment due on June 15, 2020.  Unless a further extension is still announced, any taxpayers who make estimated payments should still plan to make this estimated tax payment.  In the meantime, the IRS is also putting answers to FAQs regarding the extension on its website so you should monitor the IRS’s coronavirus page for any additional information.  In these answers, the IRS clarified that the deadline to contribute to an IRA or HSA for tax year 2019 has also been extended until July 15, 2020.

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.

About Kennyhertz Perry

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

Kennyhertz Perry attorney Ben Tompkins is a former Assistant United States Attorney in Los Angeles as well as a former Trial Attorney for the U.S. Department of Justice Tax Division. He is well equipped to provide advice regarding the evolving tax landscape, and other government policies and enforcement matters.

Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission and represents banks and financial institutions navigate unique issues that arise in the current environment, including compliance with emergency declarations, forbearance agreements, and non-traditional financial arrangements.

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Kennyhertz Perry attorney Jon Dedon previously worked in the appellate litigation division of an AmLaw 100 law firm. Jon helps commercial and residential landlords remain profitable while complying with rapidly shifting federal, state, and local emergency declarations in response to COVID-19. In addition, Jon has worked extensively on marijuana and hemp related regulatory compliance, including for numerous financial institutions and payment processors. This experience navigating rapidly evolving regulatory landscapes proves valuable to clients as the nation’s response to COVID-19 continues to develop.

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