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March252020
IRS Responds to Questions on Gift Tax Filings, Information Returns, IRA Contributions, and More . . .

Naya Pearlman, J.D., LL.M.

3.25.20 | Client Alert – UPDATED 3.28.20

In this fast-moving and changing environment, here is an update with information released by the IRS in the form of Questions and Answers (Q&A). This new information supersedes previous alerts and prior interpretations of IRS Notice 2020-18 (Notice) inconsistent with this update. However, the IRS caveats that the answers to the questions below provide responses to general inquiries only and are not citable as legal authority.

Of interest are the following questions and responses from the IRS:

Q. Does the relief provided in the Notice apply to estate and gift taxes?

A. No, normal filing and payment due dates continue to apply to estate and gift taxes.

Berdon Comment: The IRS recently supplemented the previous Notice relief with a new IRS Notice 2020-20 to defer both the due date for filing Forms 709 (U.S. Gift and Generation-Skipping Transfer Tax Return) and the date for making payments of Federal gift tax and generation-skipping transfer tax.  Accordingly, both the gift tax filing and payment deadlines are now automatically postponed to July 15, 2020.

Q. Does the relief provided in the Notice apply to the filing of information returns?

A. No, the relief only applies to the filing of Federal income tax returns due April 15, 2020.

Berdon Observation: The filing deadline of certain information forms, such as Forms 3520 and 5472, depend on the extension of the income tax returns. Moreover, in the case of Form 3520, there is no separate extension form to extend the time to file. Since there is also no extension form to be filed with the income tax returns pursuant to the Notice relief, the IRS has not yet explained how such information forms should be extended.

Q. Does this relief provide me with more time to contribute money to my IRA for 2019?

A. Yes. Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020.

Q. Does this relief provide me with more time to contribute money to my HSA or Archer MSA for 2019?

A. Yes. Contributions can be made to your HSA or Archer MSA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your HSA or Archer MSA for 2019 is also extended to July 15, 2020.

Q. Does the relief provided in the Notice apply to section 965(h) installment payments due on April 15, 2020?

A. Yes, the relief applies to section 965 installment payments due on April 15, 2020. Although the section 965(h) installment payment is generally made in respect to a taxpayer’s 2017 or 2018 tax year, under section 965(h)(2), the due date of the installment payment associated with a 2019 tax return is the due date of the taxpayer’s 2019 Federal income tax return. For any taxpayer whose Federal income tax return filing due date has been postponed from April 15 to July 15, 2020, the due date of that taxpayer’s section 965 installment payment has also been postponed to July 15, 2020.

For more information on the IRS Q&A, please visit the IRS website or our Berdon COVID-19 Information Center.

Berdon LLP New York Accountants

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