Treasury Secretary Steven Mnuchin, speaking at a coronavirus news conference today, announced that individuals who owe taxes to the IRS can defer up to $1 million, and corporations can defer up to $10 million in payments, for a period of 90 days from the April 15th deadline. At this point, the deferral applies to the income taxes owed, and there does not appear to be a similar automatic extension for filing a return.
The deferrals also appear to apply only to income taxes owed, and, according to Mnuchin, the deferral would occur on an interest-free and penalty-free basis. The U.S. Treasury estimates this move involves appropriately $300 billion in payments that would otherwise be due on April 15th, saying that it is "an enormous amount of liquidity in the system."
Exactly how the IRS will carry out this deferral process as well as whether individuals and other filers indeed still need to file an extension at April 15th remains to be seen. Further DB Alerts will be provided once specific details are released by the Internal Revenue Service. Finally, taxpayers should also keep in mind that various states and localities that impose income taxes are taking different approaches on this issue and may not be offering a similar deferral. But do stay tuned as the is current situation is very fluid.
Please feel free to contact our offices with any questions you have regarding your tax matters and the implications of the recent Coronavirus-19 events.