Guidance Issued on 90-Day Deferred Tax Payments

The IRS issued Notice 2020-17 " Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic" to provide further guidance on deferral of payment federal income tax liability due on April 15, 2020.

The notice clarifies that the deferral of tax payment to July 15, 2020 applies only to the following tax payments:

The deferral relief is limited to $1,000,000 for individual taxpayers regardless of filing status and $10,000,000 for each consolidated group or each C-corporation that does not participate in a consolidated group.

Interest and late payment penalties will begin to accumulate on July 16, 2020.

The relief does not apply to any other Federal tax payments or deposits, such as payroll tax or excise tax.

Other affected taxpayers subject to additional interest and penalties despite the relief, including certain trusts and estates, may be able to seek relief under different provisions of the Internal Revenue Code based on reasonable cause.

The notice provides relief only for the failure to pay penalty and interest. It does not provide relief for failure to file penalties. Therefore, taxpayers are expected to either file their tax returns or request an extension of time to file on or before April 15, 2020.

The relief does not apply to any state income tax payments due on April 15, 2020. HLB Gross Collins continues to monitor guidance from state tax authorities and will update this client alert as new information becomes available.

You can read the full press release on the U.S. Department of the Treasury website.