[This Blog Post has been updated to reflect the issuance of IRS Notice 2020-23.]
As mentioned in a previous blog post, IRS Notice 2020-18 provides an automatic extension of time to file income tax returns and pay federal income taxes until July 15, 2020 for Affected Taxpayers—defined as any person, including any individual, trust, estate, partnership, corporation, or other entity under IRC 7701(a)(1), with a federal income tax return or payment otherwise due on April 15, 2020.
Contrary to previous guidance provided by the answer to Question 7 of IRS “Filing and Payment Deadlines Questions and Answers,” with the issuance of IRS Notice 2020-20, the definition of Affected Taxpayers has been expanded to encompass persons subject to tax filing or payment requirements related to Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. Pursuant to this Notice, gift and GST tax returns and payments due by April 15, 2020 have now been postponed until July 15, 2020.
Amplifying Notice 2020-20, Notice 2020-23 further broadened the definition of Affected Taxpayers such that filing and payment obligations related to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and the several variations thereof, including Form 706-NA, Form 706-A, Form 706-QDT, Form 706-GS(T), Form 706-GS(D), and Form 706-GS(D-1), have been similarly suspended until July 15, 2020. The foregoing includes the requirement to issue Forms 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent, and any supplemental Forms 8971, in accordance with § 6035(a) of the Internal Revenue Code (“Code”). Correspondingly, Notice 2020-23 also includes taxpayers subject to tax payments of principal or interest due and/or annual recertification requirements as a result of an election made under §§ 6166, 6161, or 6163 of the Code. In other words, if an original or validly extended deadline to file a Form 706, or pay associated tax, was due between April 1, 2020 and July 15, 2020, the applicable deadline is now July 15, 2020.
The relief provided by Notice 2020-23 (as with the aforementioned Notices) is automatic; no extension request is required to be filed by the taxpayer. The period between April 1, 2020 and July 15, 2020 will be disregarded for purposes of calculating and applying interest, penalties, or additions to tax for failure to file or pay tax. Interest, penalties, and additions to tax related to automatically postponed return filings and taxes due, will begin to accrue on July 16, 2020. Taxpayers may still file (i) Form 8892 by July 15, 2020 to automatically extend the due date for filing Form 709 to October 15, 2020, and (ii) Form 4768 by July 15, 2020 to automatically extend the due date for filing Form 706 for six months, calculated from the original due date for relevant estate tax return.