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Virus Extends Filing Deadlines

Posted by taxguru on March 13, 2020

For the past several days, there has been a lot of speculation that all of the disruption surrounding the nationwide panic over the Wuhan Virus would motivate IRS to officially extend the upcoming filing due dates for 2019 income tax returns; March 16 for 1120S (S-corps) and 1065s (LLC & partnerships) and April 15 for personal (1040), trusts (1041) and Gift Tax (709) returns.  With today’s declaration by the President of a National Emergency, that should be a certainty.  However, no official announcement has yet been made by IRS on their news page.

Normally in situations of large disasters and emergencies, IRS is the first to issue such filing extensions so that affected people can focus on dealing with their more pressing problems.  The State tax agencies then usually follow suit with their own announcements of filing extensions.  Some States, such as California, have a policy of automatically complying with any IRS sanctioned extension of filing deadlines.  In the current situation, the Calif Franchise Tax Board (FTB) has beaten IRS to the punch and has issued its own press release giving a new due date of June 15 for all tax returns that are due March 16 and April 15.  

This is different from a normal extension that taxpayers file, because that kind is only for requesting an extension of time to file the tax returns.  It is not an extension of time for paying the taxes owed.  Penalties and interest are assessed on late payments of taxes, while the normal extension avoids the much more expensive late filing penalties.  This new emergency related extension allows all Calif. taxes for 2019 to be paid up until June 15 without any additional charges for penalties or interest. 

Whether this June 15 date will stick as the due date will obviously depend on how long it takes for the panic in the country to subside and things to get back to normal.  If the virus scare stretches out for months and months. there is a possibility that the June 15 due date will itself be extended.

I intend to add to this post as news comes out, including the anticipated IRS announcement, as well as any by other States.

This is definitely going to be another very strange Tax Season.

[Update 3/14/2020] – Still no official announcement from IRS.  The U.S. Tax Court has announced that it has cancelled all of its March and April trials, which will really back things up for them.

[Updates 3/15/2020] – Still no official announcement from IRS. I’ve seen some mentions that any delay in deadlines requires an act of Congress, which makes no sense.  For the past several years, whenever there has been a presidentially declared disaster or emergency, such as from hurricanes and tornadoes, IRS has been pretty quick to announce official extensions of time to file returns for those in the affected areas, without any congressional action. On March 6, IRS announced an extended filing deadline of July 15 for those in the vicinity of the Nashville Tennessee tornadoes. This current virus panic is the same kind of thing, although on a much larger geographic scale, the entire country.

Some free tax assistance services, such as AARP’s Tax-Aide, have announced they have shut down due to this current health scare.  Seeing as how the affects of this virus are supposed to be much more dangerous for us older folks, that does seem to be a very prudent move.  As I have had to constantly remind clients, whenever it is necessary to prioritize between tax and health matters, health should always be first in line, with or without any official IRS permission.

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