COVID-19 Update: Extended Filing & Payment Deadlines and Net Operating Loss Guidance

Posted By Jordon Rosen, CPA, AEP

IRS Notice 2020-23 – Extended Time to File and Pay Taxes

 

Yesterday, the IRS released Notice 2020-23 which vastly broadens the scope of tax returns and tax payments originally due April 15, 2020, and can now be deferred until July 15, 2020. The Notice states that the deferral until July 15 now applies to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020 and before July 15, 2020. This includes individuals, trusts, estates (and gift tax returns), corporations, and other non-corporate tax filers.

Of specific interest:

  • Americans who live and work abroad now have until July 15, 2020 to file and pay their 2019 taxes.
  • Payment of both first and second quarter 2020 federal estimated payments can be made on or before July 15, 2020.
  • Unclaimed refunds for 2016 which originally faced an April 15, 2020 deadline for filing an amended return, now have until July 15, 2020 to file.
  • Estate and GST payments and returns (Form 706) can be filed/paid by July 15, 2020.
  • Exempt organization business tax returns and payments (Form 990-T) are now due on or before July 15, 2020.
  • The Notice applies to fiscal year partnerships and corporations that have returns due during this period.
  • The Notice also covers certain deferred estate tax payments, generation-skipping transfer tax payments, excise tax payments on investment income and return filings on Form 990-PF and the filing of Form 8971 (Information Regarding Beneficiaries Acquiring Property from a Decedent).
  • The Notice also gives the IRS an extra 30 days to perform certain time sensitive acts if the last date for performance is on or after April 6 and before July 15, 2020.  Affected taxpayers would be  (1) those under examination, (2) those with a case with the Independent Appeals Office and (3) those who submitted amended return with respect to a tax for which the assessment period would expire on or after April 6 and before July 15, 2020.

IRS Notice 2020-26 and Revenue Procedure 2020-24 – Net Operating Losses

 

At the same time, the IRS issued Notice 2020-26, which grants a six-month extension of time to file Form 1045 (Tentative Application for Refund for Individuals, Estates and Trusts) or Form 1139 (Corporate Application for Tentative Refund) with respect to the carryback of a net operating loss that arose in any taxable year that began during the calendar year 2018 and that ended on or before June 30, 2019.

Revenue Procedure 2020-24 provides guidance to those with net operating losses that are carried back under the CARES Act, that allows for a carryback of any net operating loss arising in a taxable year beginning after 2017 and before 2021, to each of the preceding five taxable years.  The Revenue Procedure:

  • Provides guidance for a taxpayer to waive the carryback period for an NOL arising in a taxable year beginning after 2017 and before 2021.
  • Provides guidance that would allow the taxpayer to exclude from the carryback period any year in which the taxpayer had a repatriation transition (GILTI) tax under Section 965.
  • Provides guidance for waiving or reducing a carryback period or revoking an election to waive a carryback period for a taxable year that began before 2018 and ended after 2017.

We understand that times are uncertain and that information is changing rapidly. We are here to help advise, guide, and just listen to you! Please do not hesitate to reach out to us with your questions.

Stay Safe.

Jordon Rosen and Your BLS Team

For more information, please visit our COVID-19 Resource Center

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