Take-Away: Late last week, in response to the pandemic, the Department of Treasury released two Notices that gave taxpayer’s relief in filing their income tax returns for 2019. However, it appears that relief does not extend to the filing of federal gift tax returns or federal estate tax returns.

Background: The Tax Code gives the Department of Treasury the authority to grant relief, up to one year [IRC 7508A] with regard to statutory filing requirements in the event of a federally declared disaster. [IRC 165(i)(5)(A).] Using that authority, last week the Secretary of Treasury released two Notices of Emergency Declaration Relief to assist taxpayers.

Notice 2020-17: The March 13, 2020 Notice relieved taxpayers from paying their 2019 federal income tax liability until July 15, 2020.

Notice 2020-18: The March 20, 2020 Notice expanded upon the first; it relieved taxpayers from having to file Form 1040 income tax returns for 2019 on April 15, 2020. It also relieved taxpayers from having to file and pay the first installment of their 2020 federal income taxes, also otherwise due on April 15, 2020.

Notice Details: The details of the second Notice include the following:

Broad Coverage: The Notice covers all persons. The Tax Code defines persons to include individuals, trusts, estates, partnerships, associations, and corporations. [IRC 7701(a)(1).]

No Need to Request Extension: Taxpayers do not have to file Froms 4868 or 7004 in order to obtain the extension of time in which to file returns and pay their tax liability. These extensions are automatic.

No Limit on the Amount of Tax Postponed:  There is no limitation on the amount of the payment of tax that may be postponed under the Notice.

Self-Employment Taxes are Covered: Federal income tax payments and payments of tax on self-employment income, both due on April 15, 2020, are postponed, i.e. those taxes due for 2019 and as initial installment payments for the taxpayer’s 2020 liability, are postponed.

Interest, Penalties, or Additional Taxes Start on July 16, 2020: No interest, penalty or addition to tax for the failure to timely file federal income tax returns, or to timely pay the federal income taxes postponed, will be assessed through July 15, 2020. However, the interest, penalties, and additions to tax (for failure to file) will begin to accrue on July 16, 2020, but not retroactively.

Estate and Gift Taxes Not Covered(?): The second Notice is very clear that no extension is provided for the payment or deposit of any other type of federal tax, or the filing of any informational tax return. Consequently,  a reasonable interpretation of that Notice is that a federal gift tax return (Form 709) and a federal estate tax return (Form 706) are not extended by Notice 2020-18. Similarly, some of the federally required informational filings with regard to foreign investments and foreign bank accounts will also not be postponed by the Notice.

Conclusion: As the scope and impact of the coronavirus becomes clearer, we can expect many more notices from the Department of Treasury with regard to tax filings for 2020, e.g. a suspension of the June 15, 2020 installment payment obligation to a new date, which was not even mentioned in Notice 2020-18.