May 17 IRS Filing Deadline Extension Applies to Tax Returns and Important International Information Returns and Other Forms

On March 17, the Inter­nal Rev­enue Ser­vice (the “IRS”) extend­ed the tax fil­ing dead­line for indi­vid­u­als (see IR-2021–59, March 17, 2021). For the 2020 tax year, the nor­mal tax day of April 15 for indi­vid­u­als was deferred till May 17, 2021. Notably, the tax pay­ment dead­line was also extend­ed till May 17. No affir­ma­tive action is required by tax­pay­ers, such as, for exam­ple, fil­ing with the IRS Form 4868, Appli­ca­tion for Auto­mat­ic Exten­sion of Time to File U.S. Indi­vid­ual Income Tax Return. The exten­sion applies auto­mat­i­cal­ly. Tax­pay­ers wish­ing to fur­ther extend the tax fil­ing dead­line beyond May 17, will need to file Form 4868 with the IRS. Impor­tant­ly, such tax­pay­ers would only get until Octo­ber 15 to file their tax­es (in oth­er words, a reg­u­lar six-month exten­sion gets cut short). In its March 17 announce­ment, the IRS did not specif­i­cal­ly include any of the forms or sched­ules that are typ­i­cal­ly attached to a tax return among the items that got extend­ed. But the IRS indi­cat­ed that it would pro­vide fur­ther guid­ance in that respect. Not unex­pect­ed­ly and con­sis­tent with sound tax admin­is­tra­tion prac­tices, on March 30, the IRS issued Notice 2021–21 in which it pro­vid­ed the impor­tant con­fir­ma­tion that the exten­sion relief applies to all sched­ules, returns, and oth­er forms that are filed as attach­ments to the Form 1040 series or are required to be filed by the due date of the Form 1040 series. The Notice specif­i­cal­ly notes the fol­low­ing forms:

• Sched­ule H, House­hold Employ­ment Tax­es;
• Sched­ule SE, Self-Employ­ment Tax;
• Form 965‑A, Indi­vid­ual Report of Net 965 Tax Lia­bil­i­ty;
• Form 3520, Annu­al Return to Report Trans­ac­tions with For­eign Trusts and Receipt of Cer­tain For­eign Gifts;
• Form 5329, Addi­tion­al Tax­es on Qual­i­fied Plans (Includ­ing IRAs) and Oth­er Tax-Favored Accounts;
• Form 5471, Infor­ma­tion Return of U.S. Per­sons With Respect to Cer­tain For­eign Cor­po­ra­tions;
• Form 8621, Infor­ma­tion Return by a Share­hold­er of a Pas­sive For­eign Invest­ment Com­pa­ny or Qual­i­fied Elect­ing Fund;
• Form 8858, Infor­ma­tion Return of U.S. Per­sons With Respect to For­eign Dis­re­gard­ed Enti­ties (FDEs) and For­eign Branch­es (FBs);
• Form 8865, Return of U.S. Per­sons With Respect to Cer­tain For­eign Part­ner­ships;
• Form 8915‑E, Qual­i­fied 2020 Dis­as­ter Retire­ment Plan Dis­tri­b­u­tions and Repay­ments;
• Form 8938, State­ment of Spec­i­fied For­eign Finan­cial Assets.

  Please vis­it our web­site for key inter­na­tion­al tax report­ing forms and applic­a­ble tax fil­ing dead­lines, based on form and cat­e­go­ry of tax­pay­er (for exam­ple, U.S. res­i­dents vs. non­res­i­dent indi­vid­u­als or U.S. domes­tic busi­ness enti­ties vs. for­eign busi­ness enti­ties) — US Tax Fil­ing Dead­lines and Impor­tant Dates ‑2020 Tax Sea­son Inter­est­ing­ly, the Notice applies only to “Affect­ed Tax­pay­ers.” How­ev­er, accord­ing to the IRS, an Affect­ed Tax­pay­er is “any per­son with a Fed­er­al income tax return filed on Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-PR, Form 1040-SS, or Form 1040 (SP) (Form 1040 series), or a Fed­er­al income tax pay­ment report­ed on one of these forms, that absent this notice would be due April 15, 2021, is affect­ed by the COVID-19 emer­gency for pur­pos­es of the relief …” As such, pret­ty much any indi­vid­ual with an April 15 tax fil­ing dead­line is “affect­ed” by the Notice. LIke­ly, the new term “Affect­ed Tax­pay­er” is pri­mar­i­ly rel­e­vant for pur­pos­es of ease of ref­er­ence in the Notice (the defined term does not seem to have any spe­cial mean­ing oth­er­wise). The Notice also clar­i­fied that any elec­tions that are nor­mal­ly due by April 15 (pro­vid­ed that they are made or required to be made on a time­ly filed Form 1040 series (or attach­ment to such form), are extend­ed till May 17. U.S. expats (U.S. cit­i­zens and Green card hold­ers) liv­ing and work­ing in Cana­da or oth­er­wise out­side the Unit­ed States still have till June 15 to file their 2020 U.S. tax­es. The good news is that if any tax is due, it would be due on or before May 17 (com­pared to April 15) and, if not paid, inter­est would start accru­ing from May 17 extend­ed dead­line. The May 17 extend­ed fil­ing dead­line also applies to claims for cred­it or refund and for tax­pay­ers who want to make con­tri­bu­tions to their indi­vid­ual retire­ment arrange­ments (IRAs and Roth IRAs), health sav­ings accounts (HSAs), Archer Med­ical Sav­ings Accounts (Archer MSAs), and Coverdell edu­ca­tion sav­ings accounts (Coverdell ESAs). Equal­ly, the extend­ed May 17 dead­line applies to report­ing and pay­ment of 10-per­cent addi­tion­al tax on amounts includi­ble in gross income from 2020 dis­tri­b­u­tions from IRAs or work­place-based retire­ment plans. Form 5498 series fil­ing dead­line got extend­ed to June 30, 2021. It is unclear why the IRS would not extend the tax fil­ing dead­line for all tax­pay­ers, such as cor­po­ra­tions. It is also unclear why the IRS would equal­ly fail to extend the tax fil­ing dead­line for March 15 tax­pay­ers (pass-through enti­ties and for­eign trusts, pri­mar­i­ly) — maybe because by the time the issue was raised, the March 15 tax fil­ing dead­line had passed. It would have helped if the IRS made a deci­sion to extend fil­ing dead­lines ear­ly in the year and applied it con­sis­tent­ly to all cat­e­gories of tax­pay­ers, like they did it for the 2019 tax year fil­ings (the tax fil­ing dead­line was extend­ed to July 15, 2020 last year — notably, not for pass-through enti­ties and for­eign trusts — they were left out).