Recently, there have been many updates on important matters related to the ongoing health crisis in our country. IRS action has already been taken and federal tax legislation already enacted to ease tax compliance burdens and economic pain caused by COVID-19.
After briefly offering more limited relief, the IRS almost immediately pivoted to a policy that provides the following to all taxpayers—meaning all individuals, trusts, estates, partnerships, associations, companies or corporations regardless of whether or how much they are affected by COVID-19:
3. The relief is for
Federal income tax payments (including tax payments on self-employment income) and Federal income tax returns due on April 15, 2020 for the person’s 2019 tax year, and
Federal estimated income tax payments (including tax payments on self-employment income) due on April 15, 2020 for the person’s 2020 tax year.
4. No extension is provided for the filing of any other Federal informational tax returns, including estate and gift tax returns, or the payment or deposit of the associated Federal taxes due. This means that taxpayers who must file a gift tax return (Form 709) for 2019 should either file their Form 709 or request an extension of time to file that return on or before April 15, 2020. This is particularly important for Forms 709 that may report an allocation of Generation-Skipping Transfer Tax exemption. Also, taxpayers that owe gift tax for 2019 should pay that tax on or before April 15, 2020 even if an extension to file the fit tax return is requested.
5. As a result of the return filing and tax payment postponement from April 15, 2020, to July 15, 2020, that period is disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the postponed income tax returns or pay the postponed income taxes. Interest, penalties and additions to tax will begin to accrue again on July 16, 2020.We are encouraging all of our clients to press forward with getting tax information over to us so we can get returns prepared. If you have not sent in your personal or business information, please do so as quickly as possible. You can send your documents to our office via FedEx/USPS or briefly drop off at our offices. We are urging clients to use our online portal to upload information to us at the below link:
If a refund is determined, we want to get your return filed and help you to obtain those refunds sooner rather than later. If a balance is due, we want you to know how much is payable so you can have the next 90-100 days to best plan for funding the payment or begin assembling information to implement a payment plan with the IRS.
We know business owners will need to provide tax returns if they are pursuing loans or lines of credit.
Also, we know that interest rates are at historic lows, which means it will become attractive for businesses and individuals to refinance loans and mortgages. All underwriters will be looking to examine 2019 business and personal tax returns, so we want to have those ready to go for you.