Some Good News: Tax Deadlines Have Been Extended to July 15, 2020

The economic uncertainty caused by the Coronavirus extends to income tax obligations, especially in light of the upcoming April 15 deadline for filing income tax returns. IRS Notice 2020-18 and Notice 2020-58 give some relief to taxpayers by allowing extensions to file tax returns and pay income taxes. Here are some highlights that now apply to the current tax filing season:

There is an automatic extension of time to file income tax returns for tax year 2019. The normal filing deadline of April 15 is now extended to July 15, 2020. This extension applies to all taxpayers, not only those who are ill or quarantined.
The extension applies to filing tax returns, as well as to payment of tax due.
The extension is automatic, i.e., you don’t have to request an extension.
The extension applies to individuals, trusts, estates, partnerships and corporations.
For the period April 15 to July 15, no interest and no penalties will be assessed by the IRS, including for 2019 tax liabilities and for 2020 estimated payments. On July 16, penalties and interest will begin again.
Note the following important quirk: For estimated 1^st Quarter 2020 tax payments, the deadline is moved from April 15 to July 15, 2020. However, 2^nd Quarter 2020 tax payments are still due June 15, 2020. Second Quarter payments are thus due before First Quarter payments, and missing the June 15 deadline will trigger interest and penalties.
You will still be able to extend the filing deadline, as in past years, to October 15. However, this additional extension is not automatic. You still have to file your extension request (Form 4868) by July 15. There is no extension for paying your tax. You can request an extension to file your tax return by October 15, but you still have to pay by July 15.
The deadline for 2019 IRA contributions has also been extended to July 15, 2020.
For the FBAR form (FinCEN 114), Report of Foreign Bank and Financial Accounts, which is also normally due on April 15, there is an automatic extension until October 15. No application is needed. The 2019 FBAR extended deadline is October 15, 2020.
There has been no extension for informational returns such as IRS Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts.
Other offshore reporting forms, such as IRS Form 8938, Statement of Specified Foreign Financial Assets, Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company (PFIC), Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, and Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, are attached to a taxpayer’s regular income tax form (1040), the deadline for which is now extended to July 15. Although not explicitly stated in the recent IRS guidance, we presume that the deadline for these additional forms is also July 15, 2020.

It is important to keep in mind that if you are presently in an audit or dispute with the IRS, including an appeal, or received a notice or bill, the process is still ongoing and deadlines are not necessarily tolled. The IRS is still open and working, IRS revenue agents and appeals agents are working from home, and procedural deadlines are still in effect unless you have an extended deadline in writing from the IRS. IRS Notice 2020-59 states:

No new audits will be commenced. Note, however, that this is not across-the-board. “High income non-filers”, in particular, will continue to be under scrutiny.
Liens and levies are suspended until July 15.
Pre-existing audits and appeals will continue through correspondence, telephone and video-conference.
If a statue of limitations will soon expire, the IRS will act to preserve its rights, including asking taxpayers to sign waivers of the statute of limitations and, if not, assessments will be made in the short term.

On the state level, not all states have offered similar extensions. The New York State Department of Taxation and Finance has issued Notice N-20-2, Announcement Regarding Relief from Certain Filing and Payment Deadlines due to the Novel Coronavirus, COVID-19. The NYS notice echoes the relief on the IRS level:

The April 15, 2020 filing deadline has been extended to July 15, 2020.
The extension applies to personal income tax returns and corporate tax returns originally due April 15, 2020.
Payments due April 15 are deferred to July 15, without penalties and interest, regardless of amount owed.
The extension is automatic; no form or application is required.
Like on the federal level, an additional extension to October 15, 2020 is possible, if the request for extension is filed by July 15 and the taxpayer properly estimates and pays 2019 tax liability with the extension request.

Please contact us with any questions.