IRS Releases FAQs & People First Initiative
In response to the COVID-19 pandemic, the U.S. Department of the Treasury (Treasury) and IRS have recently released more information on their plans to provide taxpayers with relief during this time of uncertainty, including responses to frequently asked questions (FAQ) on the tax deadline postponement and introduction of additional taxpayer relief measures through a People First Initiative.
FAQs on April 15 Tax Deadline Postponement
On March 24, 2020, the Treasury and IRS released FAQs regarding Notice 2020-18, which automatically postpones the federal income tax filing and payment deadlines from April 15, 2020, to July 15, 2020. The FAQs provide further clarity on a few items previously addressed in this BKD Thoughtware® alert.
- Fiscal year filers, including exempt organizations filing Form 990-T, with a tax return due date of April 15, 2020, whether that’s the original or extended due date, have until July 15, 2020, to file their income tax return. For filers with a due date other than April 15, 2020, the deadline hasn’t yet been extended, e.g., calendar-year tax-exempt organizations with a due date of May 15, 2020.
- Contributions to an individual retirement account, workplace-based retirement plan, health savings account or archer medical savings account for 2019 can be made through July 15, 2020.
In addition, the FAQs clarify the filing and payment relief doesn’t apply to estate and gift tax returns, information returns or payroll and excise taxes. Also, the deadline to withdraw any excess deferrals from a workplace-based retirement plan for 2019 remains April 15, 2020.
People First Initiative
On March 25, 2020, the IRS announced its People First Initiative, which provides taxpayers with relief on a variety of issues ranging from postponing compliance actions to easing payment guidelines. In this news release, the IRS has asserted that, during this period, they will generally not start new field, office and correspondence examinations and will continue to work refund claims where possible and without in-person contact. In addition, for taxpayers under an existing Installment Agreement with the IRS, payments due between April 1 and July 15, 2020, are suspended—although interest will continue to accrue on any unpaid balance.
BKD COVID-19 Resource Center
Due to the ongoing nature of the COVID-19 outbreak, Congress, the IRS and Treasury continue to release new guidance daily to provide relief and assistance to individual and business taxpayers. Visit BKD’s COVID-19 Resource Center to stay up to date with relevant news, changing guidelines and new regulations.
Reach out to your BKD Trusted Advisor™ or use the Contact Us form below if you have questions about how these changes may affect you.