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IRS Extends More Tax Deadlines, Provides Guidance and Additional Relief

Tax Deadlines and Payments

The IRS issued Notice 2020-23 today, April 9, 2020, expanded relief to additional returns, tax payments and deadlines.  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. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.

Besides the April 15 estimated tax payment previously extended to July 15, 2020, today’s (April 9, 2020) notice also extends relief to estimated tax payments due June 15, 2020. This means that any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.

IRS Provides Partnerships the Option to File Amended Tax Returns and NOL Relief

The IRS issued Revenue Procedure 2020-23 April 8, 2020, allowing eligible partnerships for tax years beginning 2018 and 2019 the option to file an amended Form 1065 and furnish amended K-1’s as an alternative option to filing an administrative adjustment request (AAR).  This is particularly important for those partnerships which were not allowed to elect out of the centralized partnership audit regime (CPAR) for 2018 and 2019.  Partnerships can file amended returns for any reason, as the amendment does not have to be specifically related to tax law changes from the CARES Act.

Amended returns under this revenue procedure must be filed by September 30, 2020 for the 2018 and 2019 tax years.  For those partnerships filing amended returns, the partnership would check the “Amended Return” box, issue amended Schedule K-1’s and write ““FILED PURSUANT TO REV PROC 2020-23” at the top of the amended return.

IRS provides guidance under the CARES Act to taxpayers with net operating losses

The IRS issued today, April 9, 2020, guidance providing tax relief under the CARES Act for taxpayers with net operating losses.  Yesterday, April 8, 2020, the IRS issued tax relief for partnerships filing amended returns (see section above).

COVID Relief for taxpayers claiming NOLs
Revenue Procedure 2020-24 provides guidance to taxpayers with net operating losses that are carried back under the CARES Act by providing procedures for:

  • waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021,
  • disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period, and
  • waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before Jan. 1, 2018, and ended after Dec. 31, 2017.

Six month extension of time for filing NOL forms
In Notice 2020-26, the IRS grants a six-month extension of time to file Form 1045 or Form 1139, as applicable, with respect to the carryback of a net operating loss that arose in any taxable year that began during calendar year 2018 and that ended on or before June 30, 2019.  Individuals, trusts, and estates would file Form 1045, and corporations would file Form 1139.