(Update as of March 21, 2020 – both the IRS and Wisconsin Department of Revenue have now announced that filing deadlines for returns due on April 15, 2020 and payments related thereto have also been extended. Both income tax returns and related payments due are now extended to July 15, 2020. Additionally, the Federal $1M and $10M deferral limitations have been removed. Individual and Corporate taxpayers may now defer all 2019 income tax payments due to the Federal and Wisconsin governments for 90 days.)
Treasury Secretary Steven Mnuchin has outlined a program that will allow corporations and individuals an additional 90 days to pay any taxes due on their 2019 income tax returns. While details are yet forthcoming, the 90-day extension to pay the tax due will be applied automatically and no interest or penalties will be charged.
While a tax return due date may be extended by filing a request with the Internal Revenue Service, ordinarily the extension does not include an extension of the time to pay the tax due. Under regular circumstances, failing to pay by the due date automatically triggers a failure to pay penalty and interest on the underpayment. With Secretary Mnuchin’s announcement of the payment extension, individual taxpayers may defer the payment of up to $1M and corporate taxpayers may defer up to $10M in taxes for 90 days. The $1M individual deferral is designed to take in to account tax due in connection with passthrough entities reflected on a Form 1040.
Details of the program will be forthcoming in additional guidance. However, the announcement currently only provides for an extension of time to pay the tax shown on a return. It does not yet extend the tax return filing deadline for the same 90 days. Therefore, tax returns due on April 15th, should still be filed by that deadline or extended. Yet, based on language used in the press conference, it is expected that the filing deadline may also soon be extended. Until such an announcement is made, however, an extension request should still be filed if more time is needed to complete a return.
The Federal and Wisconsin action related to the Coronavirus is still developing. We will provide continued updates as the situation evolves.
von Briesen & Roper Legal Update is a periodic publication of von Briesen & Roper, s.c. It is intended for general information purposes for the community and highlights recent changes and developments in the legal area. This publication does not constitute legal advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.