In the morning of March 20, 2020, the US Treasury Secretary announced that, in addition to the 90 day deferral of payments announced in Notice 2020-17 earlier in the week, the actual due date for tax returns would be pushed back from April 15 to July 15.  He did so in the following post to Twitter:

[1]

The post, being subject to Twitter’s limit on the size of messages, does not go into any significant detail on various issues that would arise from such a delay. 

In the early evening Eastern time on March 20, the IRS issued Notice 2020-18[2] providing the official guidance on the new due date.  The notice restates and expands upon relief granted in Notice 2020-17.

The ruling repeats the same definition of “Affected Taxpayer” as was found in Notice 2020-17:

The Secretary of the Treasury has determined that any person with a Federal income tax payment or a Federal income tax return due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer). The term “person” includes an individual, a trust, estate, partnership, association, company or corporation, as provided in section 7701(a)(1) of the Code.[3]

The notice indicates that the relief is granted regardless of the amount of payment due, a change from Notice 2020-17.  It now reads:

For an Affected Taxpayer, the due date for filing Federal income tax returns and making Federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004. There is no limitation on the amount of the payment that may be postponed.[4]

One key question some will wonder about is whether a taxpayer who ends up unable to file on July 15 will be able to file for an extension of time to file on that delayed due date, or will that be too late?  Reg. §301.7508A-1(f) Example 4 may give the answer, presuming the IRS decides to make use of §7508A’s time sensitive act relief options for this relief.

The example reads:

Example 4.

(i) H and W, individual calendar year taxpayers, intend to file a joint Form 1040, “U.S. Individual Income Tax Return,” for the 2008 taxable year and are required to file a Schedule H, “Household Employment Taxes.” The joint return is due on April 15, 2009. H and W's principal residence is in County M in State Q.

(ii) On April 2, 2009, a severe ice storm strikes County M. On April 5, 2009, certain counties in State Q (including County M) are determined to be disaster areas within the meaning of section 1033(h)(3) that are eligible for assistance by the Federal government under the Stafford Act. Also on April 5, 2009, the IRS determines that County M in State Q is a covered disaster area and publishes guidance announcing that the time period for affected taxpayers to file returns, pay taxes, and perform other time-sensitive acts falling on or after April 2, 2009, and on or before June 2, 2009, has been postponed to June 2, 2009.

(iii) Because H and W's principal residence is in County M, H and W are affected taxpayers. April 15, 2009, the due date for the filing of H and W's 2008 Form 1040 and Schedule H, falls within the postponement period described in the IRS published guidance. Thus, H and W's return will be timely if filed on or before June 2, 2009. If H and W request an extension of time to file under section 6081 on or before June 2, 2009, the extension is deemed to have been filed by April 15, 2009. Thus, H and W's return will be timely if filed on or before October 15, 2009.

(iv) April 15, 2009, is also the due date for the payment due on the return. This date falls within the postponement period described in the IRS published guidance. Thus, the payment of tax due with the return will be timely if paid on or before June 2, 2009 the last day of the postponement period. If H and W fail to pay the tax due on the 2008 Form 1040 by June 2, 2009, and do not receive an extension of time to pay under section 6161, H and W will be subject to failure to pay penalties and accrual of interest beginning on June 3, 2009.

In the example, using the actual 2020 dates, a Form 4868 filed on July 15 will be deemed to have been filed on April 15, with a six-month extension of time to file running from the deemed filing date, not the actual filing date.  Thus, the return would be due on October 15.

But we should remember that IRC §7508A allows the IRS to pick and choose what gets delayed.  The fact that “no Form 4868 has to be filed” certainly suggests that we are delaying when an extension must be requested to be able to file in October, but some may not find that as clear as they would like.  Hopefully the IRS explicitly provides absolute clarity on this in information they will likely post on Monday.

The ruling provides the following specific relief, limited to income tax and self-employment tax matters:

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.

No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.[5]

The specific nature of relief granted is outlined as follows in the Notice:

As a result of the postponement of the due date for filing Federal income tax returns and making Federal income tax payments from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the Federal income tax returns or to pay the Federal income taxes postponed by this notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax filings and payments will begin to accrue on July 16, 2020.[6]

[1] https://twitter.com/stevenmnuchin1/status/1241002750483324930?s=20, March 20, 2020

[2] Notice 2020-18, March 20, 2020, https://www.irs.gov/pub/irs-drop/n-20-18.pdf, retrieved March 20, 2020

[3] Notice 2020-18, p. 2

[4] Notice 2020-18, p. 2

[5] Notice 2020-18, pp. 2-3

[6] Notice 2020-18, p. 3