IRS Broadens Tax Filing and Payment Relief, Refund Guidance Coming Soon

Previous tax return and payment relief were centered around income tax filings due by April 15, 2020. This newest relief applies to all taxpayers that have a filing or payment, specified in this notice, with a due date falling on or after April 1, 2020, and before July 15, 2020 (“affected taxpayers”). This applies to individuals, corporations, trusts, estates and other non-corporate taxpayers.

This automatic relief applies to all affected taxpayers. Under this relief, the entire period will be void of any IRS computed interest, penalty or failure to file tax penalties.

Specified Relief

• Individual – all income tax payments, estimates and filings during the designated period are deferred to July 15, 2020
• Corporations/S-Corporations – all income tax payments, estimates and fillings during the designated period are deferred to July 15, 2020. This applies to the calendar and fiscal year ends
• Partnerships – all income tax filings during the designated period are deferred to July 15, 2020
• Estates, Trusts and Generation-Skipping Tax – all Form 1041 and Form 706 tax payments, estimates and fillings during the designated period are deferred to July 15, 2020. Similarly, estate principle and interest payments on certain elections.
• Beneficiaries – all Form 8971 information regarding beneficiaries acquiring property fillings during the designated period are deferred to July 15, 2020
• Gift and Generation-Skipping Tax – all Form 709 GST transfer tax payments and filings during the designated period are deferred to July 15, 2020
• Tax Exempts – all Form 990 tax payments, estimates and filings on investment income, as well as Form 4720 excise tax filings during the designated period are deferred to July 15, 2020
• Transition Tax – installment payments under IRC 965 transition tax due during the designated period are deferred to July 15, 2020.
• Other Forms – the relief not only includes the Specified Forms, but also all schedules, returns and other forms required to be attached to the Specified Forms or required to be filed by the due date of the Specified Forms. This includes elections that are required to be made on a timely filed Specified Form.
• Time-Sensitive Actions – includes additional time for:
  • filing certain tax petitions to the tax court
  • filing a claim for credit or refund of any tax
  • finding replacement property for like-kind exchanges
  • filing Form 3115 for changes in accounting method
  • obtaining a written acknowledgment of charitable contributions under §170(f)
  • correcting excess contributions to education IRAs
  • making deductible 2019 IRA contributions
  • among a long list of others.

Cautionary Note: The Notice indicates that relief is limited to that which is specifically outlined in Notices 2020-18, 2020-20 and 2020-23. It does not apply to any other federal taxes, returns or time-sensitive acts. Please consult your BMF Advisor to discuss the best approach for your situation.

Refund Guidance from IRS Expected Soon

With the myriad of questions from taxpayers regarding refund claims available under the CARES Act, the IRS released a statement informing corporate and individual taxpayers that additional guidance will be available in the coming days. The IRS is recommending taxpayers await further filing instructions to file refund claims before utilizing traditional processes. Guidance will be posted to IRS.gov.

Under the CARES Act, taxpayers can file amended returns to obtain tax refunds. A few of the provisions to consider include:

• Net operating loss (NOL) modifications – NOL’s can be carried back five years for tax years beginning after December 31, 2017, and before January 1, 2021. Further, the 80% taxable income limitation has been removed until the tax year 2021.
• Qualified Improvement Property (QIP) – bonus depreciation can be applied to QIP resulting in immediate deductions in lieu of depreciating.
• Expanded Interest Limitation Modification – The 30% of adjusted taxable income interest deduction limitation has been increased temporarily for taxable years beginning in 2019 and 2020 to 50%.
• AMT Credit Acceleration – Taxpayers with AMT credits will be able to claim a refund for the entire amount of credit on their 2019 filing.

Your BMF Advisor is ready to help you with the best tax planning and filing strategy for your unique situation.

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