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Law360 (April 9, 2020, 7:03 PM EDT ) In light of the novel coronavirus pandemic, individuals and businesses that owe estimated tax payments for the second quarter of 2020 may wait until July 15 before paying, the Internal Revenue Service said Thursday.
Those that owe estimated taxes for the second quarter may wait until July 15, instead of June 15, to submit payments without incurring a penalty, the agency said in a notice. The IRS also extended until July 15 the deadline for several other tax returns and payments, including returns for Americans living abroad, corporations, nonprofits, partnerships, estates and trusts.
The agency had previously extended the tax return filing deadline for individuals to July 15 and said first quarter estimated tax payments originally due April 15 could be submitted by the later date as well.
"Today's notice expands this relief to additional returns, tax payments and other actions," the agency said. "As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020."
The IRS also released guidance Thursday implementing a provision of the recent $2 trillion COVID-19 relief law that allows business to carry back net operating losses for up to five years.
The guidance also provided procedures for waiving an NOL from those years and to disregard certain income that would normally have been subject to the Internal Revenue Code Section 965
transition tax during the NOL carryback period. The Coronavirus Aid, Relief and Economic Security Act
signed by President Donald Trump last month allows businesses to carry back losses from 2018, 2019 and 2020 for up to five years. In addition, net operating losses temporarily will not be subject to a taxable income limit, meaning they can fully offset income.The agency on Thursday also provided a six-month extension to file NOL forms for tax years beginning in 2018 and ending before June 30, 2019.
U.S. Treasury Secretary Steven Mnuchin said last month that the 2019 tax return filing deadline for individuals and businesses would be moved from April 15 to July 15. Mnuchin made the announcement after receiving criticism from lawmakers and practitioners that the government extended the payment deadline, but not the tax filing deadline until July 15.
The American Institute of Certified Public Accountants complimented the government for providing the guidance.
"We commend Treasury and the IRS for recognizing the added stress these deadlines cause and taking action to ensure taxpayers and their advisers can take care of their families and their employees appropriately," said Barry Melancon, AICPA president and CEO.
But the group noted that the agency should continue to act.
"We continue to urge Treasury and IRS to develop a contingency plan for the next phase of relief should that be needed," Melancon said. "As a country, we should not risk anyone's life to meet tax filing obligations."
--Editing by Neil Cohen.
For a reprint of this article, please contact reprints@law360.com.
