Last month, the IRS announced that taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15, 2020. No late-filing penalty, late-payment penalty or interest will be due. Notice 2020-23, issued April 9, 2020, expands this relief to additional returns, tax payments and other actions.
Taxpayers, including Americans who live and work abroad, nonresident aliens without Form W-2 wages subject to withholding tax, and foreign corporations with no U.S. office, with a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, now have until July 15, 2020, to file the following returns and make payments without penalties or interest:
- Form 1040 series returns (including forms 1040-NR, 1040-NR-EZ, 1040-SS and 1040-PR), and
- Form 1120 series returns (including forms 1120-F and 1120-FSC).
Such returns would otherwise be due on June 15, 2020, absent the relief contained in Notice 2020-23.
Notice 2020-23 also clarifies that relief extends to international information returns (such as Forms 3520, 5471, 5472, 8621, 8858, 8865 and 8938) and to installment payments under section 965(h) due on or after April 1, 2020, and before July 15, 2020. The IRS had previously announced on March 24, 2020, in Q&A format that the relief provided in Notice 2020-18 applies to section 965(h) installment payments due April 15, 2020.
Taxpayers who require additional time may file Forms 4868 or 7004 by July 15, 2020. To avoid interest and penalties when filing a tax return after July 15, 2020, taxpayers should pay the tax they estimate as due with the extension request.
The IRS also gives taxpayers until July 15, 2020, to perform other time-sensitive actions described in Regulation 301.7508A-1(c)(1) and Rev. Proc. 2018-58, that are due to be performed on or after April 1, 2020, and before July 15, 2020.
Section 12 of the revenue procedure lists 50 international tax actions that can be put on hold in the event of a disaster, including:
- Notice of Cost Sharing Arrangement (due to the IRS within 90 days of first incurring costs under the arrangement),
- Form of payment selected for any platform contribution transaction (must be specified no later than the due date of the applicable tax return, including extensions),
- Election to be treated as an IC-DISC (Form 4876-A),
- Withholding tax on sales of U.S. Real Property interest by a foreign person (Form 8288), and
- Partnership withholding on effectively connected taxable income allocable to foreign partners (Forms 8804, 8805 and 8813).
Unless an action is specifically listed in Rev. Proc. 2018-58 (or other IRS guidance, like Notice 2020-23), the postponement of time to file and/or pay does not apply. Notably missing from the list are Forms 1042 and 1042-S, notice required to be filed with the IRS pursuant to section 897 to avoid FIRPTA withholding, and withholding obligations under sections 864(c)(8) and 1446(f) on the purchase of an interest in a partnership engaged in a U.S. trade or business from a foreign person. Further, Rev. Proc. 2018-58 and Notice 2020-23 apply only to certain federal tax deadlines. Taxpayers should consult with their advisor on any potential tax relief being offered by a particular state.
For additional information and a general discussion about Notice 2020-23, please read Overview of relief provided by Notice 2020-23