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IRS Provides for Automatic Postponement of Certain Estate Tax Returns and Gift Tax Returns

In response to the COVID-19 pandemic, the United States Department of the Treasury (the “Treasury”) and the Internal Revenue Service (the “IRS”) began releasing notices that provided for relief to taxpayers by postponing the due date of particular tax returns from April 15, 2020 until July 15, 2020.

In the Treasury and IRS’s most recent notice, Notice 2020-23, the relief granted further expands the types of returns that qualify for automatic postponement and notably includes estate tax returns (Form 706) and gift tax returns (Form 709) that were to be due on or after April 1, 2020 and before July 15, 2020. These postponements are automatic and do not require the taxpayer to request such a postponement.

Notably, however, if a taxpayer needs additional time beyond July 15, 2020, they will need to follow regular extension protocol and procedure, and such extension will not go beyond the statutory or regulatory extension date. This means that the length of the extension is calculated based on the original due date and not July 15, 2020.

For example, an estate tax return must generally be filed and any tax due must be paid within 9 months of the decedent's date of death, but an executor may apply for an automatic 6-month extension of time to file the estate tax return. Therefore, if an estate tax return was originally due on April 15, 2020, it would qualify for the automatic postponement under Notice 2020-23, and be due on July 15, 2020. However, if the executor needed more time past July 15, 2020, and applied for the typical automatic 6-month extension, the estate tax return would be due on or before October 15, 2020 (6 months from April 15, 2020 not 6 months from July 15, 2020).

This Article is meant to be informational only. You should consult with an attorney or tax professional about specific cases. A copy of Notice 2020-23 can be found here.

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