IRS Income Tax Return Deadline Postponed
The governmental response to the COVID-19 global pandemic has been swift and unprecedented. Congress enacted sweeping legislation under the CARES Act to help both individuals and business owners financially. The states have also enacted specific legislation related to business owners. Additionally, the Internal Revenue Service (IRS) has also done its part in attempting to alleviate the financial burdens of both individuals and business owners during this time of uncertainty.
Tax Deadline
As most people are aware, the deadline to file taxes is typically no later than April 15 of the following year. However, in an announcement on Twitter, the IRS made the decision on March 20, 2020 that the tax deadline would be extended from April 15 to July 15, 2020. This extension of a tax deadline applies to every individual, estate, trust, partnership, company, association and corporation under IRS Notice 2020-18.
Amount of Taxes
The IRS previously had a maximum amount that would be allowed to be postponed by individuals and business owners. However, the newly updated notice indicates that there is no limit to the total amount of tax that a person or business may postpone.
Penalties and Interest
Even though taxpayers have the legal right to postpone their payments to July 15, 2020, the IRS will not impose any interest or penalties during those additional three months.
Extension Request
Unlike typical requests for an extension for tax payments, this new rule states that this postponement is automatic. No paperwork or request is needed, and a taxpayer may simply wait to file their taxes up to July 15, 2020. For any taxpayer that would need additional time past the July 15, 2020 extension, an additional extension may be requested by filing a Form 4868 through the IRS website, tax software, or their tax professional. Any business that needs to file this extension would need to file a Form 7004.
Tax Refunds
According to information provided by the IRS, tax refunds should not be affected by any of these new regulations. If you believe you have a tax refund coming to you, you will still likely want to file as soon as possible. Many tax refunds are still being processed and issued within three weeks. If you are feeling financially stressed as a business owner or as an individual and think you may be getting a tax refund, you should file your return as soon as possible.
Let Us Help You Today
While the IRS has been very generous by allowing an extension of the payment and filing of taxes for the 2019 fiscal year, many business owners and individuals will still struggle during this time as the COVID-19 virus continues to impact several areas of life and our economy. If you are considering filing for bankruptcy, consider visiting with an experienced bankruptcy attorney who can help you understand your best steps. If you are considering bankruptcy, make sure that you visit with an experienced attorney to ensure that you never miss a 341 Meeting of Creditors hearing or any of your other legal obligations. Contact us for a consultation to see how an experienced West Palm Beach bankruptcy attorney at Kelley Kaplan & Eller at 561-264-6850 can help you understand your legal rights.
Resources:
congress.gov/bill/116th-congress/senate-bill/3548/text?q=product+actualizaci%C3%B3n
irs.gov/pub/irs-drop/n-20-18.pdf
https://www.kelleylawoffice.com/tax-refunds-and-bankruptcy/
