The IRS issued Notice 2020-17 clarifying the recent announcement by Treasury Secretary Mnuchin extending tax payments. The due date for filing 2019 federal income tax returns remains April 15 absent a valid extension. We do not know if there will be a failure to file penalty if an extension or return is not submitted by April 15.

This is what we know for sure:

• Individuals and small businesses can delay paying any federal income tax payments until July 15, 2020.
  • Interest and penalties are waived
  • Applies to federal income tax up to $1 million
  • Includes self-employment tax
  • Includes federal estimated income tax payments due on April 15, 2020
• Corporations can delay paying any federal income tax payments until July 15, 2020.
  • Interest and penalties are waived
  • Applies to federal income tax up to $10 million
  • Does not apply to corporations that file a consolidated return

At this time, penalties and interest will begin to accrue on July 16, 2020 (assuming no further relief is provided). No extension is provided for payment or deposit of any other type of federal tax, or for the filing of any tax return or information return.

The guidance does not cover Form 2210, so if a client did not pay 2019 estimated taxes, they will still need to file Form 2210 and pay that penalty. However, if they owe a balance due, there is relief if they pay by July 15.

The guidance in Notice 2020-17 is specific and narrow in scope and we can only rely on what is provided to date. Bear in mind that all other due dates remain in place until we know otherwise.

Polk & Associates

Large enough to serve a diverse clientele, yet small enough to maintain a hands-on approach, we are committed to maintaining the highest accounting and ethical standards with continuous education, extensive research resources, and excellent quality control.

Polk and Associates is a member of the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants. The firm participates in the AICPA Peer Review Program, and has always received the highest level of award for its audit practice and quality control.