IRS releases formal guidance for taxpayers affected by Coronavirus and COVID-19

Update March 21, 2020:
The IRS released Notice 2020-18 on the evening of March 20, 2020 and I have a new post about that notice. Notice 2020-18 extends the time to file and to pay your taxes from April 15, 2020 until July 15, 2020.

Well, we’ve been waiting for the IRS to give us formal guidance that explains what Treasury Secretary Mnuchin said on Tuesday, March 17, 2020. They have finally released Notice 2020-17, titled “Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.”

You can find the full copy are the irs.gov link here: https://www.irs.gov/pub/irs-drop/n-20-17.pdf

The document formalizes what Mnuchin said and doesn’t contain any big surprises. The good thing that is immediately noticable is that the extension of time to pay also applies to the first quarter estimated tax payments for 2020 due on April 15, 2020.

Important points to know

The IRS will grant payment relief for 90 days with no payment penalties or interest if the taxpayer is:

• An individual who owes less than $1 million, or
• A corporation that owes less than $10 million.

This announcement did not include a delay in the deadline for filing the tax returns. Therefore, all tax returns that are normally due on April 15, 2020, are still due on that date.

Remaining questions

I do have a few initial questions but I’ll wait to see if those get addressed before I put too much research into them.

Check out the #taxtwitter threads for more thoughts on this announcement.

Follow up:

After the IRS released this notice, Barry Melancon, the president and CEO of the American Institute of CPAs, issued a statement that reflects what many tax professionals feel:

“Given the current environment, this extension process is impossible for many taxpayers. Treasury must act immediately by extending the April 15^th filing deadline and providing more clarity on the details of recent relief actions.”
https://www.aicpa.org/press/pressreleases/2020/aicpa-ceo-barry-melancon-says-irs-must-provide-immediate-tax-filing-relief.html

More resources:

Mnuchin says taxpayers must file by April 15, can delay payments for 90 days

IRS Issues Guidance On Tax Payment Deferrals, Confirms That Tax Filing Due Dates Have Not Been Extended

Please note, this is not considered tax advice and you should always discuss the tax filing deadline and payment deadline with you tax professional. This is especially important as the situation is fluid right now and could change at any moment in the future.