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IRS Extends More Tax Deadlines and Issues NOL Carryback Regulations

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IRS Extends More Tax Deadlines and Issues NOL Carryback Regulations

To provide added relief to taxpayers, the Department of Treasury and IRS announced yesterday, April 9, 2020, the extension of additional tax filing and payments dates for individuals and businesses to July 15, 2020, as well as provided updates on relief for taxpayers with net operating losses (NOLs) and those taxpayers that file international information forms.

Under this latest announcement individuals, trusts, estates, corporations and other non-corporate tax filers qualify for extra time to file their returns and make payments of estimated tax. This means that anyone, including Americans living and working abroad, has until July 15, 2020 to file their 2019 federal income tax return and pay any tax due.

Estimated Tax Payments:

Yesterday’s announcement also extended relief on estimated tax payments due on June 15, 2020. Now, any individual or corporation that has a quarterly estimated tax payment due between April 1, 2020 and July 15, 2020 can wait until July 15, 2020 to make that payment, without penalty.

State Tax Filings:

These specific relief efforts are only applicable to federal taxes; however, many states have also announced filing extensions and payment deferments to July 15, 2020. An updated list of state actions is available from the AICPA here.

Filing Extensions Beyond July 15, 2020

Taxpayers who need additional time to file their 2019 tax returns beyond July 15, 2020 can request an extension to Oct. 15, 2020. This extension to Oct. 15, 2020 does not extend the payment due date. Tax payments are due by July 15, 2020.

International Information Forms Filing:

Yesterday, the IRS also expanded its stance on the filing of international forms. The latest IRS notice extends the filing date of specified forms, as well as all schedules, returns and other forms that are filed as attachments to July 15, 2020. This relief also includes any related installment payments due on or after April 1, 2020 and before July 15, 2020.

COVID-19 Relief for Taxpayers Claiming NOLs

Revenue Procedure 2020-24 provides guidance to taxpayers with net operating losses that are carried back under the CARES Act by providing procedures for:

  • Waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021,
  • Disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period, and
  • Waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before Jan. 1, 2018, and ended after Dec. 31, 2017.

Six Month Extension for Filing NOL Forms

In Notice 2020-26, the IRS grants a six-month extension to file Forms 1045 and 1139,  which are used to file NOL carryback claims.  These rules apply to NOLs that arose in any taxable year that began during calendar year 2018 and ended on or before June 30, 2019.

COVID-19 Relief for Partnerships with NOLs

On April 8, 2020, the IRS issued Revenue Procedure 2020-23, allowing eligible partnerships to file amended partnership returns using a Form 1065, U.S. Return of Partnership Income, by checking the “Amended Return” box and issuing amended Schedules K-1, Partner’s Share of Income, Deductions, Credits, to each of its partners. Partnerships filing these amended returns should write “FILED PURSUANT TO REV PROC 2020-23” at the top of the amended return.

What’s Next:

Aprio recommends submitting tax data as soon as possible so we can evaluate your tax position and advise on the best payment options and strategies.

Aprio will provide additional updates and details as they are made available. If you have any immediate questions, please reach out to your Aprio Relationship Partner, or contact us here.

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