by Trent Krassow

There is never a “good time” for a global pandemic or a major economic disruption. However, when those things hit during tax time for US taxpayers, it can create additional anxiety on top of the already high levels we all are experiencing due to the health threat we are facing. Let’s face it, taxes create their own anxiety without such major events. It is especially difficult to meet deadlines when we are trying to maintain proper social distance, limiting our ability to meet with tax professionals, gather documents, etc.

To ease some of this anxiety, as well as to encourage proper social distancing and limit the spread of Coronavirus in the near term, the IRS, as well as most states, including Colorado, have granted an automatic extension of both the filing and payment due dates for 2019 tax returns. The Federal/IRS extension applies to all states and US territories and is not geographically limited to the current “hot spots” of Coronavirus outbreak within the United States.

A few key points:

1.      Federal and Colorado due dates are now July 15th, 2020 for 2019 returns and amounts owed.

Original guidance for the IRS limited the payment extension to $1 million for individuals and $10 million for corporations. New guidance from the IRS has removed these limitations.

2.      No extension needs to be requested – it is automatic.

3.      A normal extension can still be requested for individuals or businesses. This moves only the filing date – payments must be made by July 15th, even if an additional extension is requested. More on normal extensions below.

4.      This extension also applies to foreign bank account disclosures (FBAR)

5.      The extension applies to Quarter 1 estimate payments, usually due on 4/15. These are now also due on 7/15/20.

6.      Quarter 2 estimate payments are still due 6/15/20, which means that your second quarter payments are actually due before your first quarter payments!

7.      As of this time (subject to change), this extension does NOT apply to the following returns:

a.      Severance tax returns

b.      State, county, and local sales tax reports in Northern Colorado

c.      Personal Property tax reports in Northern Colorado

d.      Payroll tax reports at the state or Federal level

We will continue to monitor requirements for these returns, and post updates as they are available.

A note on normal extensions: while you do not need to apply for an extension for the July 15th deadline (this is automatically given to all tax payers), you can apply for a normal extension beyond this. However, that extension will follow the normal extension due dates. For example, an individual return usually due on 4/15 is automatically extended to 7/15 this year. You can apply for a normal extension to 10/15/20, but your payment, if any, is still due 7/15.

Our firm will continue to process returns as quickly as possible. While disruptions in workflow and staffing from Coronavirus have created the need to extend our normal tax season, we do not anticipate a need to carry most returns all the way to July 15th, except in very special circumstances.

We place a high priority on the safety of both our customers and our team and have implemented the following protocols at this time. We will continue to update our protocols as recommendations are updated by local, state, and national departments of health or other authoritative bodies:

1.      Secure document drop box outside our office to place tax documents, including signature pages. The box is emptied and disinfected daily.

2.      Expanded use of our secure online portal, which allows for secure online document exchange, messaging, and e-signing of your tax return. Please let us know of questions on this.

3.      Our office is now closed to customers except by appointment. Our phones are still active and monitored, and we continue to work on tax returns and answer your questions.

4.      Rigorous physical cleaning regimen to keep the office and building as clean as possible to help limit the spread of disease.

5.      Reduced on-site staff through the use of mature technologies for at-home workers

Please let us know of questions you may have.