Federal Tax Extension Does Not Apply to Certain International Filings

2 min

On March 20, 2020, the U.S. Treasury Department (the "Treasury") extended the tax filing and payment deadline to July 15, 2020 for (i) all 2019 federal tax returns, and (ii) any April 15, 2020 estimated federal income tax payments. This postponement is granted for all federal taxpayers, including individuals and businesses, and will not result in interest or penalties. Contrary to prior notices, there is no cap on the amount of tax payment deferral that is available to taxpayers.

April 15, 2020 Deadline Still Applies for FBAR and Other Non-Income Tax Filings

The emergency filing extension is only available for federal income tax returns and as such, U.S. taxpayers who are required to file a Report of Foreign Bank and Financial Account ("FBAR"), excise tax filing, non-income tax return, or other federal informational return are still subject to the original April 15, 2020 (or other regularly scheduled due date, as applicable). Consistent with existing procedures, taxpayers are allowed an automatic extension to October 15, 2020 for FBAR filings.

Deadline Extended to July 15, 2020 for Transition Tax Installments

On March 24, 2020, the Internal Revenue Services ("IRS") released supplemental guidance clarifying that the payment deadline extension also applies to transition tax installment payments otherwise due on April 15, 2020. Although transition tax payments are made with respect to a taxpayer's 2017 or 2018 taxable year, the due date of the 2019 installment payment is associated with and due on the same date as the taxpayer's 2019 federal income tax return and therefore, falls within the scope of the deadline extension.

How Can Venable Help?

The tax deadline extension is a part of the federal government's increasing efforts to mitigate the economic effects of the Coronavirus pandemic. It is expected that additional tax policy changes are forthcoming. Venable's international tax team can help clients understand these developments and provide guidance on how to responsively and constructively implement tax planning and tax compliance strategies.