IRS Announces Extended Deadlines and New Legislation in Response to the Coronavirus Outbreak
IRS Unveils “People First Initiative” and COVID-19 Effort Adjustments; Extends Due Dates, Postpones Compliance Programs
The Internal Revenue Service has announced a series of steps it’s taking to help taxpayers, businesses, and others affected by the coronavirus. To assist people who are facing the challenges of COVID-19 issues, the IRS is providing relief on a variety of things – including extending tax filing deadlines, easing payment guidelines, and suspending compliance actions.
The IRS relief program is called the People First Initiative. It includes provisions for tax deadlines, installment agreements, offers in compromise (OICs), non-filers, field collection activities, automated liens and levies, passport certifications, private debt collection, earned income tax credit (EITC) and wage verification reviews, Independent Office of Appeals, and more. [See below for details.]
IRS Commissioner Chuck Rettig said the following:
“The IRS is taking extraordinary steps to help the people of our country. In addition to extending tax deadlines and working on new legislation, the IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. During this difficult time, we want people working together, focused on their well-being, helping each other and others less fortunate.
“The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes. We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.
“IRS employees care about our people and our country, and they have a strong desire to help improve this situation. These new actions reflect just one of many ways our employees are working hard every day to assist the nation. We care, a lot. IRS employees are actively engaged, and they have always delivered for their communities and our country. The People First Initiative is designed to help people take care of themselves and is a key part of our ongoing response to the coronavirus effort.
“The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others. We are committed to helping people get through this period, and our employees will remain focused on these and other helpful efforts in the days and weeks ahead. I ask for your personal support, your understanding – and your patience – as we navigate our way forward together. Stay safe and take care of your families, friends and others.”
Extended Tax Filing & Payment Deadlines for 2020
The federal tax due date for 2019 individual income tax returns (Form 1040) would normally be April 15, 2020, but that deadline has been moved to July 15, 2020 this year. Additionally, income tax payments that would typically be due by April 15, 2020 are now due by July 15, 2020. The extra time also applies to estimated tax payments for tax year 2020 that are due on April 15, 2020 and are now due on July 15, 2020.
This is an automatic extension that applies to all taxpayers – including individuals, corporations, non-corporate tax filers, and people who pay self-employment tax – and it means that taxpayers can defer their federal income tax without penalties or interest, regardless of the amount they owe. You do not have to file any additional forms or contact the IRS to receive this automatic tax relief.
Note that this extension applies to federal tax deadlines only. State tax departments may have different deadlines that apply to your state income taxes.
Tax Refunds Continue
If you are expecting a tax refund, you should file as soon as you can.
If possible, don’t wait until July 15 to file. The IRS continues to send out tax refunds, so you should file as soon as you can if you’re owed a tax refund for your 2019 return.
For a faster refund, use e-file to file your return and choose the Direct Deposit option.
Non-filers: Take action if you didn’t file a tax return for a previous year.
The IRS says that anyone with a tax-filing obligation who hasn’t filed a return for 2018 (or a previous year) should file now. There is pending legislation in response to the coronavirus that includes some potential tax credits and rebates for those who have filed a return for tax years 2018 and/or 2019. According to the IRS, “Those without 2018 tax filings on record could potentially affect mailings of stimulus checks.”
The IRS urges people who have not filed their return for several years to file their past due returns. Over a million households that haven’t filed tax returns in the last 3 years are actually owed tax refunds – and they still have time to claim this money. If you are in this situation, you should consider contacting a tax professional to review your options because the time to receive tax refunds is limited by statute.
Note that those who haven’t filed tax returns for tax year 2016 and are owed a refund still face an April 15, 2020 deadline to file their 2016 return. This deadline has not been extended and current law requires 2016 returns to be filed by April 15, 2020.
For taxpayers with an existing Installment Agreement, tax payments that are due between April 1, 2020 and July 15, 2020 are temporarily suspended. According to the IRS, “Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer.” The IRS will not default any Installment Agreements during this period – however, by law, interest will continue to accrue on any unpaid balances.
For more information, see the Coronavirus Tax Relief page of the IRS website.