March 21, 2020
IRS Extends Filing Deadline, Allows Unlimited Tax Deferral
Posted by COVID-19 Rapid Response Team
Times are changing, but how many more changes and modifications will we continue to see? We’ll see…
First, the payment deadline moves to July 15. Then, the IRS and Treasury pushed the tax filing deadline to July 15, which aligned the due dates for filing with the extension of time for payments.
Today, guidance came out to allow filers coping with the novel COVID-19 pandemic more time to prepare tax returns. But, it also removed the caps pertaining to the tax payments, to where we now have unlimited tax payment deferral for individuals and businesses.
- The guidance supersedes and modifies prior guidance giving extra time to pay their taxes.
- That guidance provides for unlimited caps to required payments whereas prior guidance allowed Individuals to defer up to $1 million and corporations up to $10 million of tax payments without interest and penalties.
- We still haven’t seen guidance directly related to the transition tax under §965 installment payments, which are normally due 4/15. We still believe it’s prudent to remit the payment by April 15, 2020. The IRS guidance states that the July 15 date applies to 2019 tax year payments and the first quarter of 2020. That likely means the transition tax under §965 is still due April 15, 2020 since it pertains to the 2017 tax year.
- State updates are coming in daily. We’ll continue to update you as we know more.
- Also, with additional bills working through the system, various provisions could perhaps be impactful here. If a 5-year carryback provision becomes law, what could that mean for the transition tax?
Times are changing indeed. More to come.
These are unprecedented times. And we know you, your families and your organizations need support, now more than ever. Our top priorities as your trusted advisor is to ensure we’re helping you through these tough times. Visit https://www.armaninollp.com/articles/covid-19-resource-center/ for our Crisis Management Resources and contact information for our COVID-19 Rapid Response Team Leaders.