Update on Extension of Tax Filing Deadlines for US expats

Apr 14, 2020

US expat, US expat tax services, tax, tax services, the IRS, tax filing, notice, extension, COVID

On April 9, 2020, the IRS released Notice 2020-23, expanding on the relief previously provided in Notices 2020-17 and 2020-18. Notice 2020-23 is affecting Tax Filing Deadlines for US expats.

Understanding the importance of tax filing deadlines for US expats in our March blog, we reviewed IRS notices. The IRS notices allowed individuals and businesses to delay their 2019 tax filings (Notice 2020-18) and payments (Notice 2020-17). Notices considered tax filings and payments due April 15, 2020, until July 15, 2020. The delay in tax filings will occur without incurring interest or fines. Notably, the relief provided did not extend to the schedules and information forms accompanying a return (i.e., forms 3520, 5471, 5472 and 8938) that US taxpayers residing in Canada are used to.

Notice 2020-23 extends this relief to information forms and schedules accompanying returns due between April 1, 2020, and July 15, 2020. It provides an automatic extension to July 15, 2020.

This relief covers  quarterly estimated income tax payments and transition tax installment payments under I.R.C. §965(h). Relief also includes gift and estate tax returns due during this period. Taxpayers can also file an extension by 15.7.2020. This will extend the filing deadline to 15.10.2020 (for individuals and companies with a calendar year-end). However, filing an extension will not extend the time to pay any tax due after 15.7.2020. Normal interest and penalties will apply to payments made after that date.

Importantly, taxpayers with state tax filing obligations should be aware that this relief does not automatically extend to all tax filing duties. Taxpayers will need to confirm this with the respective state. As of 10.4. 2020, all states with a personal income tax have prolonged their filing deadlines. The exact details of this relief should be confirmed with each individual state. The AICPA has also prepared an updated chart summarizing the latest developments on state tax filings related to COVID-19.

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