Major organizations suspended operations as a result of COVID-19, more commonly referred to as the Coronavirus. The Supreme Court halted all courtroom sessions for the foreseeable future. The National Basketball Association, National Hockey League, Major League Baseball, National Collegiate Athletic Association and the Professional Golfers’ Association ceased operations, foregoing hundreds of millions of dollars as the virus multiplies. As corporate and organizational dominoes fall, government decisions are being made at a rapid pace.
On March 17, 2020, Treasury Secretary Steven Mnuchin announced that the deadline to pay individual and corporate taxes will be extended by 90 days. The extension is available to individual taxpayers who owe $1 million in taxes or less and corporations which owe $10 million in taxes or less.
The majority of United States taxpayers historically file their tax returns early to receive a refund check sooner. However, many high net worth individuals and business owners apply for an automatic six-month extension to file their tax returns because their returns are more complicated. Generally, those taxpayers must submit 90% of their tax liability on or before April 15 or they would incur interest and penalties on the late payment. The 90-day extension will likely provide taxpayers in higher income tax brackets with a reprieve as the financial markets remain volatile.
The Internal Revenue Service (“IRS”) routinely extends the filing deadline for victims of natural disasters. The IRS granted victims of the recent tornadoes in Tennessee until July 15 to file their tax returns. Many lawmakers are encouraging the IRS to extend the filing deadline on a national scale. As of the date of this article, the filing deadline remains April 15.
Natural disasters and pandemics create uncertainty and unrest. These events do not wait for individuals to consult with their accountant or attorney before causing distress. Proper tax planning may provide individuals with a sense of security and allow them to centralize focus on health and loved ones.
Michael Salad is a partner in Cooper Levenson’s tax practice group. He concentrates his practice on estate planning, probate, business transactions, mergers and acquisitions, tax matters and cyber risk management. Michael holds an LL.M. in Estate Planning and Elder Law. Michael is licensed to practice law in New Jersey, Florida, New York, Pennsylvania and the District of Columbia. Michael may be reached at 609.572.7616; 954.889.1850 or via e-mail at firstname.lastname@example.org.
Craig Panholzer is an associate in Cooper Levenson’s tax practice group. He concentrates his practice on estate planning, business transactions and tax matters. Craig may be reached at 954.889.1856 or via e-mail at email@example.com.