The Department of the Treasury and the Internal Revenue Service (IRS) postponed filing and tax payment deadlines for individuals, businesses, trusts, and estates in a series of notices published over the past few weeks.
The notices directly affect the deadlines for filing and paying income tax, estate tax, gift tax, and generation-skipping transfer tax.
IRS Notice 2020-18 provided relief for individual federal income tax return filing and payments due on April 15, 2020. Individual taxpayers must file and pay federal income taxes by July 15, 2020, to avoid accruing interest or penalties on unpaid federal income taxes for the 2019 tax year.
IRS Notice 2020-20 expanded the relief provided by earlier notices to individual gift tax and generation-skipping transfer tax return filing and payments. Individual taxpayers required to file IRS Form 709 and make corresponding gift tax or generation-skipping transfer tax payments by April 15, 2020, now have until July 15, 2020, to file IRS Form 709 and make any necessary gift and generation-skipping transfer tax payments.
For example, if an individual made a taxable gift (perhaps in trust or to a family member in excess of $15,000) in 2019, that individual would normally be required to file IRS Form 709 to either pay gift tax or allocate remaining exemption to the taxable gift by April 15, 2020. Now, that individual may file IRS Form 709 on July 15, 2020, without incurring a penalty.
IRS Notice 2020-23 is the latest notice published by the IRS and further expands relief to filing estate tax returns and making estate tax payments. All estate tax returns (IRS Form 706) and payments due between April 1, 2020, and July 15, 2020, are now due by July 15, 2020.
For example, if an individual died on July 15, 2019, with a taxable estate (in excess of $11.58 million), the decedent’s estate tax return would generally be due on April 15, 2020. The executor of the decedent’s estate may now file the estate tax return on July 15, 2020, without incurring a penalty.
IRS Notice 2020-23 also extends the deadline for federal income tax return filing and payments for businesses (including corporations, S corporations, and partnerships), trusts, and estates. Any federal income tax return or payment required to be filed or made between April 1, 2020, and July 15, 2020, is now due by July 15, 2020.
The IRS also published a list of Frequently Asked Questions and Answers regarding the deadline extensions for return filing and payments and IRS Notice 2020-23.