By Anthony Diosdi
Treasury Secretary Steven Mnuchin recently announced that the Internal Revenue Service (“IRS”) is deferring income tax payments for the 2019 tax year by 90 days. Steven Mnuchin says that taxpayers will not be assessed interest and penalties on the late payments. According to Mnuchin, individuals can defer up to $1 million in federal taxes. Businesses can defer up to $10 million in federal taxes. The deferral is only available for tax payments. It does not permit the deferral of payroll taxes or estate and gift taxes. The announcement also does not impact estimated tax payment requirements. As of now, the income and corporate tax filing deadlines still have not pushed back.
Although the announcement this is a step in the right direction. It does not go nearly far enough. Given the economic impact that the coronavirus is having on the economy, many taxpayers who cannot satisfy their 2019 tax liabilities on April 15th, probably cannot their 2019 tax liabilities on June 15th. Not to mention the thousands of newly out of work taxpayers currently making monthly payments to the IRS for back tax liabilities. Many of these taxpayers will default on their payment plans with the IRS. Hopefully in the very near future the IRS will announce additional relief from penalties and interest for those who have been hard hit by this contagion. In addition, hopefully the IRS will relax the so-called “national” and “local” standards when establishing new monthly payment plans for back tax liabilities.
Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP, located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida. Anthony Diosdi advises clients in tax matters domestically and internationally throughout the United States, Asia, Europe, Australia, Canada, and South America. Anthony Diosdi may be reached at (415) 318-3990 or by email: firstname.lastname@example.org.
This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.