IRS issues guidance regarding extension of tax payment deadline

The Notice provides that any person with a Federal Income tax payment due on April 15, 2020, such as income taxes due with an individual’s 2019 income tax return and one’s 2020 first quarter estimated income tax liability, will be afforded a limited extension to make payments until July 15, 2020.  As reinforced by the Secretary, the extension does not apply to the filing of tax returns or related extensions.

Mazars Insight

Although the Notice does provide payment relief, tax practitioners and taxpayers still have the burden of preparing tax returns and/or extensions by April 15th. Many businesses across the country have been shut down and are focusing on maintaining the viability of their business.  In addition, access to their books and records could be challenging. It would be helpful if the IRS were to grant not only payment relief, but also filing relief.

Relief shall apply for corporations and each consolidated group up to the first $10,000,000 of income tax due.  For all other persons (including trusts and estates) with an April 15th filing date, the relief will be applicable up to the first $1,000,000 of income tax due.  No interest, penalty or addition to tax for failure to pay will be assessed on the amount of Federal income tax postponed by the Notice for the period beginning on April 15, 2020 and ending on July 15, 2020.

The Notice also provides that certain taxpayers still subject to penalties or additions to tax despite the relief granted by the Notice may still seek reasonable cause relief.

Mazars USA LLP is continuing our operations in a normal fashion and we have ensured that our systems are able to handle a fully remote workforce without interruption of client services. We encourage you to send us your tax documents as soon as possible (preferably in electronic format) so that we can continue providing the exceptional service that you have come to expect from Mazars USA.

Please contact your Mazars professional for additional information.

Published on March 19, 2020

The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.