The unprecedented fallout from the coronavirus pandemic has meant unprecedented concessions by the U.S. government in a number of respects.
The CARES Act’s $2 trillion stimulus package represents perhaps the largest investment in this regard, but a number of U.S. government agencies have enacted other significant rule changes to help the citizenry get through these challenging times.
Monica S. Simon is head of legal at Forge Global and has over 15 years of experience as a securities lawyer in both public and private markets.
Before joining Forge, she was deputy general counsel at Carta, and general counsel for Carta's broker-dealer entity. Prior to that, Simon was an attorney with Willkie Farr, where she advised registered broker-dealers and investment advisors, and assistant general counsel at Goldman Sachs, where she covered equities sales and trading and was counsel for the Goldman Alternative Trading System.
Steve Novak is the Senior Director of Accountant Partnerships at Navan, where he leads the company's efforts to help accounting firms transform their CAS practices through technology automation. Previously, he spent over six years at BILL, holding key leadership roles, including Senior Director of Business Partnerships and Senior Director of Accountant Partnerships. During his tenure, he played a crucial role in expanding BILL's Accountant partner network, driving adoption of its payment management platform. Prior to his time at BILL, Steve held various roles at BlackLine, XCM Solutions, and Thomson Reuters.
Patrick is the founder and CEO of Sidecar Health. He has more than 20 years' experience in sales, marketing, product, and engineering with both public and private companies. Prior to Sidecar Health, Patrick was Chief Executive Officer at Katch, a leading online enroller of consumers in individual health plans. Patrick was also part of the founding management team at QuinStreet, (QNST), an executive at BEA Systems (BEAS), and a consultant at McKinsey & Company.
One such rule change is the extension of this year’s April 15 tax deadline until July 15. Importantly, the extension also applies to Americans living abroad who would otherwise generally have a filing deadline of June 15.
The scope of the July 15 extension
When the July 15 extension was first announced in March, the taxpayer community felt a measure of relief combined with a modicum of uncertainty.
The extra time was welcome, but questions remained: Does the extension apply to the obligation to file, or the obligation to pay tax, or both? Does the extension apply to tax forms due on April 15 other than the basic federal income tax return (Form 1040)? Finally, what about estimated taxes? Are those being extended too?
Since the original announcement, the IRS has published several updates to clarify the scope of the July 15 extension.
First, the IRS announced that the extension to July 15 applies both to the obligation to file the tax return and to pay any taxes that are due.
The IRS then clarified that the extension applies to other tax forms that would otherwise be due on April 15. This includes corporate tax returns, estate and gift tax returns, exempt organization returns, as well as international information returns and related schedules.
The broad scope of the extension relief is especially relevant for U.S. citizens living abroad who are often required to file additional forms to report assets and activities outside the United States including, for instance, the Form 3520 to report a foreign trust, the Form 5471 to report a foreign corporation, and the Form 8938 to report foreign financial assets under FATCA.
Finally, the IRS did in fact extend the deadlines for quarterly estimated tax payments due on April 15 (the first payment date) and June 15 (the second payment date) to July 15 as well.
One important caveat for citizens living in the United States is the federal extension to July 15 does not necessarily apply to U.S. state and local filing deadlines. Taxpayers should check with their state tax agencies to verify whether an extension has been granted this year for the particular form obligation.
Further extensions still available
With July 15 a few weeks away, taxpayers still have ample opportunity to file this year’s tax return on time.
As with most years, taxpayers who are unable to file by this year’s deadline can file a request for an extension to Oct. 15, 2020. Understandably, the deadline to file the request itself was moved to July 15. It should be noted that the extension to Oct. 15 is only an extension to file and does not extend the time to pay federal income tax beyond July 15, 2020.
For U.S. citizens living abroad, an even further extension may be granted to Dec. 15 under certain circumstances. A tax professional should be consulted to discuss this extension option.
For more information on the July 15 extension as well as other rule changes in response to the pandemic, the IRS has created a webpage dedicated to this topic at https://www.irs.gov/coronavirus.
