On Wednesday March 18, the IRS issued Notice 2020-17, Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic, as follow up to Treasury Secretary Steven Mnuchin’s comments from Tuesday March 17th. The notice is to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency. The Secretary has determined that any person with a Federal income tax payment due April 15, 2020 is considered an Affected Taxpayer for purposes of the relief. The notice grants relief such that an Affected Taxpayer may postpone their Federal income tax payments otherwise due April 15, 2020 to July 15, 2020. The postpone payment is up to $10,000,000 for each C Corporation or consolidated group. For all other Affected Taxpayers, the postpone payment amount is up to $1,000,000 regardless of filing status. The postpone payment amount relief is available for Federal income tax payments, including tax on self-employment income, as well as the 2020 first quarter estimated tax payment due on April 15, 2020. It is strongly noted that the Notice 2020-17 does not provide payment extensions for any other type of Federal tax (such as payroll tax or excise tax obligations) and the notice does not provide an extension of the filing of any tax return or information return. Any interest, penalty and additions to tax with respect to the postponement payment from April 15, 2020 to July 15, 2020 will be disregarded and waived. If any payment is not made by July 15, 2020, interest and penalty will start to accrued on July 16, 2020.
In summary, the key points to know are that there is no extension relief to file a tax return, meaning that Affected Taxpayers will still need to timely file or formally extend their tax returns by 4/15, and only payment of their Federal tax obligations may be postponed until July 15, 2020.
If you have any further questions about the Federal postponement payment, please contact someone from your ARB engagement team.