Additional Relief for Taxpayers – Federal Gift (and Generation-Skipping Transfer) Tax Returns Automatically Extended

COVID-19
March 30, 2020
 

The United States Department of the Treasury and Internal Revenue Service (“IRS”) released a new Notice 2020-20, which augments Notice 2020-18 to provide the following payment relief to taxpayers affected by COVID-19 (“Affected Taxpayers”).

Notice 2020-20 automatically extends the due date for the filing of a 2019 Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return to July 15, 2020. This relief is automatic and does not require filing Form 8892.

However, an Affected Taxpayer who needs additional time to file beyond the July 15th deadline can request an extension by filing Form 8892 or Form 4868 by July 15, 2020, which extends the time to file a gift tax return to October 15, 2020. Any Federal Gift and/or Generation-Skipping Transfer Tax payments postponed by Notice 2020-20 are due July 15, 2020.

Notice 2020-18 provided the following payment relief to Affected Taxpayers with respect to the upcoming tax deadlines:

  • Federal income tax filings due on April 15, 2020 are automatically extended to July 15, 2020;
  • Federal income tax payments due on April 15, 2020 with respect to an Affected Taxpayer’s 2019 taxable year are due July 15, 2020; 
  • Federal estimated income tax payments due on April 15, 2020 with respect to an Affected Taxpayer’s 2020 taxable year are due July 15, 2020; and
  • The calculation of any interest, penalty, or addition to tax for the failure to pay with respect to such postponed federal income tax payments will be disregarded for the period beginning on April 15, 2020 and ending on July 15, 2020.

An Affected Taxpayer is defined as any person (including, individuals, trusts and estates, partnerships, associations, companies or corporations) with a federal income tax payment due on April 15, 2020. Notice 2020-18 provides that there is no limitation on the amount of such federal income tax payment that is postponed, and presumably, since Notice 2020-20 augments the prior notice, no limitation should apply to postponed gift and generation-skipping transfer tax payments.

Tax returns for which no relief is provided include a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return with a due date (or extended due date) based on the decedent’s date of death, and a Form 1041, U.S. Income Tax Return for Estates and Trusts for any estate or trust that is on a fiscal year and required to file a return.

The federal relief does not apply to state income tax filing dates, income tax payments, estimated income tax payments, school district income tax filings and payments, fiduciary income tax returns, or the calculation of interest, penalty or addition to tax for failure to pay. However, on March 27, 2020, Ohio Governor DeWine signed House Bill 197 – the emergency pandemic relief measure that the Ohio General Assembly passed – that extended the filing and payment date of state, municipal and school district income tax returns to July 15, 2020, aligned with federal relief. States that have not already announced extending deadlines will likely implement extensions to adjust to the new federal deadline.


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