Founder at Protax Consulting Services, Marc J Strohl CPA, has just revealed essential information on the most recent developments related to the Covid-19 Tax Deadline Statuses.
NEW YORK, NY, April 09, 2020 /Neptune100/ — Founder at Protax Consulting Services, Marc J Strohl CPA, has just revealed essential information on the most recent developments related to the Covid-19 Tax Deadline Statuses. For more information please visit Protax Consulting Services, Inc. (“Protax”).
Tax deadline status-Tax Season 2019
Our firm is actively engaged and longtime members of the New York State Society of Certified Public Accountants (NYSSCPA) and The American Institute of Certified Public Accountants (AICPA). I am personal colleagues of Joanne Barry the NYSSCPA Executive Director and CEO and Barry C. Melancon, CPA, CGMA CEO, Association of International Certified Professional Accountants and President and CEO, American Institute of CPAs. I have been in constant contact with each regarding the ongoing crisis in our professional community.
On March 11, the AICPA called for the Treasury Department and the IRS to provide relief to all taxpayers in light of the uncertainty and challenges caused by the spread of Covid-19.
The AICPA sought to have the IRS provide automatic extensions on both the payment and separately the filing of tax returns until October 15, 2020 with no need to file any extension forms. As a waiver of all payment and filing penalties and interest
On Tuesday, March 17, 2020 Treasury Secretary Steven Mnuchin announced and on March 18, 2020 the IRS released IRS Notice 2020-17 introducing a 90 day delay on the imposition of late payment penalties (1/2 of 1% of the balance of tax owed per month) and interest only of tax owed of under $1,000,000 until July 15, 2020, but made no mention of an April 15, 2020 extension to file however instead encouraging taxpayers to file by April 15, 2020 (While also reminding them of the ability to file Form 4868 to request an extension of time to file until October 15, 2020 to avoid the late filing penalty (5% of the balance owed per month)), the AICPA requested it’s members undergo an email writing campaign to change minds.
As of March 18, 2020 pending further changes in U.S. Treasury/ IRS guidance- As per the IRS.gov website, the current deadline to file your 2019 U.S. income taxes remains unchanged at April 15, 2020.
On Thursday March 19, 2020 I was honored to be invited on a call with Barry C. Melancon, CPA, CGMA (CEO, Association of International Certified Professional Accountants and President and CEO, American Institute of CPAs), which included among others the honorable Treasury Secretary Steven Mnuchin.
During that call we urged the Treasury Secretary to extend the 2019 U.S. Tax season deadline beyond the Standard April 15, 2020 deadline, since the IRS had not as of yet released permission to allow the filing of Form 4868 (the Automatic 6 month Extension Form), which typically occurs on or around March 31 of every successive tax year.
In order to electronically file said Form 4868 extensions, this procedure assumes that CPA firms nationwide have access to staff and premises to undertake what is otherwise a very time-consuming effort.
We expressed our concerns to the Treasury Secretary the very real possibility that as the Covid-19 virus advances, CPA firms nationwide may no longer have access to their premises or staff (due to sickness) in order to electronically file said extensions.
We are thrilled to announce that today Friday, March 20, 2020 at 10:04 am through a Twitter Tweet by Steven Mnuchin Treasury Secretary it seems our efforts and telephone call paid off, as we learned that the White House administration had caved in to our demands and would also extend the Tax Day deadline from April 15 to July 15 as the Treasury Secretary had done three (3) days earlier for the payment deadline, this is for both individual taxpayers and businesses.
A little later on Friday, March 20, 2020 at 11:49 am I learned by a personal email from Joanne Barry NYSSCPA Executive Director and CEO that the New York State Department of Tax and Finance (NYSDTF) had matched the IRS deadline extension of April 15 to July 15, 2020. Another victory. You will note that PCSI clients had advance notice of this ,as Joanne Barry’s public statement only came out 7 days later on March 27, 2020 to all members.
The NYSDTF only released official guidance on March 29, 2020 Notice N-20-2, Announcement Regarding Relief from Certain Filing and Payment Deadlines due to the Novel Coronavirus, COVID-19.
On March 20, 2020 the IRS issued IRS Notice 2020-18, in addition on March 24, 2020 the IRS released 24 Q&A to clarify the underlying confusion surrounding the IRS Notice 2020- 18 release.
The new IRS Notice 2020-18 and 24 Q&A may be found here:
IRS Notice 2020-18:
On March 20, 2020 hours after PCSI informed our clients on recent developments with regards to not only the 2019 US Income tax return April 15, 2020 payment deadline being extended to July 15, 2020 (on March 17, 2020- IRS by Notice 2020-17) but also the filing Tax Day deadline being extended from April 15 to July 15, 2020 (on March 20, 2020), the IRS released IRS Notice 2020-18 clarifying its stance in relation to both Notices (2020-17 and 2020-18), the highlights are as follows:
1. Notice 2020-18 released March 20,2020 completely supersedes Notice 2020-17 released March 17, 2020.
2. The due date for BOTH the filing of 2019 Federal income tax returns (Tax Day) and the making of Federal 2019 income tax payments historically due April 15, 2020 are now both automatically extended to July 15, 2020. Penalties and interest free through July 15, 2020.
3. No Extension Forms(s) are required for the July 15, 2020 extended due date. This is a paperless, effortless automatic extension.
4. The $1,000,000 limit imposed on the payment extension to July 15, 2020 in IRS Notice 2020-17 is now removed by IRS Notice 2020-18, there is now no longer a dollar limit on the payment extension to July 15, 2020.
5. The relief on the payment extension to July 15, 2020 applies to any Federal income tax payments due on April 15, 2020 including the first 2020 estimated tax payment due April 15, 2020 but not the second estimated tax payment due June 15, 2020.
6. The extension of time to file from April 15, 2020 to July 15, 2020 does not apply to any other type of Federal tax (only income tax) and does not apply to any Federal information returns that are not filed with the Federal income tax return.
7. Amounts due on July 15, 2020 by reason of IRS Notice 2020-18 extension not paid by July 15, 2020 will begin to accrue interest, penalties and additions to tax as of July 16, 2020 and forward.
The 24 Q&A Released on March 24. 2020- Further Clarified the following- Relevant Highlights only:
1. IRS Notice 2020-18 relates to ALL taxpayers with respect to any Federal income tax payment due on April 15, 2020- that is for the 2019 income tax year or the first 2020 estimated tax payment due April 15, 2020.
2. Extension(s) of time to pay and filing of the 2019 U.S. income tax returns, relates to both Form 1040 resident income tax returns and 1040NR nonresident alien income tax returns alike.
3. Relief only applies to Federal income tax returns due on April 15, 2020, not the filing of information returns.
4. Taxpayers unable to file by the extended 2019 July 15, 2020 deadline must file Form 4868 to extend their filings until October 15, 2020, as has always been the case.
5. For taxpayers that have already filed their 2019 Federal income tax returns owing funds that were designated to be withdrawn on or before April 15, 2020 prior to the release of the IRS Notice 2020- 18 guidance, may modify this withdrawal either through:
a. IRS Direct Pay- by using the confirmation number may access the Look Up feature to Modify or Cancel their payment, or
b. A scheduled payment as part of filing your tax return e-filing authorizing an electronic funds withdrawal, may cancel or revoke said payment by contacting the U.S. Treasury Financial Agent at 888-353-4537 no later than two (2) business days before the scheduled payment date.
6. IRS Notice 2020-18 does not apply to State tax payments, although most states have fallen into conformity with IRS Notice 2020-18 extending the payment and filing (Tax Day) deadline from April 15, 2020 to July 15, 2020
7. IRA’s- the April 15, 2020 deadline to make the 2019 Traditional and/ or Roth IRA contributions have now as a result of IRS Notice 2020-18 also been extended from April 15 until July 15, 2020.
8. Any resulting additional 10% tax for early withdrawal of IRA or workplace-based retirement plans in 2019 are also extended to July 15, 2020.
9. The Health Savings (HSA’s) and Archer Medical Savings Accounts (MSA’s) deadline to make contributions are also extended for 2019 until July 15, 2020.
10. The Statutory Period of Limitation to claim a refund for the 2016 U.S. tax year deadline of April 15, 2020, is not extended (not included in this Notice 2020-18.) It remains April 15, 2020
Again, we covet your trust and loyalty, and we are privileged to provide our professional CPA U.S. income tax services to you.
May you all stay safe and healthy!
Marc J Strohl, CPA of Protax Consulting Services has written articles published by Thomson Reuters in their Practical International Tax Strategies, Journal of International Taxation and Practical Tax Strategies publications and that are referenced and used by other U.S. tax C.P.A. and Attorney consultancy firms both in and outside the U.S. – such as the Big Four – to educate their clients and other tax experts in terms of international tax situations.
In addition Strohl conducts webinars and live presentations for CCH Wolters Kluwer, Strafford Publications, the Clear Law Institute and the New York State Society of Certified Public Accountants (NYSSCPA), Furthered Education and Lawline. He has been quoted in the NYSSCPA’s Trusted Professional, New York Post, and The Wall Street Journal.
Name: Marc J Strohl CPA
Email: [email protected]
Organization: Protax Consulting Services
Address: Seven Penn Plaza Suite 416, New York, NY 10001
Phone: (212) 714-1805
For more information, please visit ProtaxConsulting.com