Federal, state, and local taxing authorities have been making moves to address COVID-19. Here is what we know:

Federal Government
Earlier this month, Treasury Secretary Steven Mnuchin (“Treasury Secretary”) informed Congress about the potential economic effects pushing back the filing deadline could have on the broader U.S. economy in light of COVID-19. On March 17, 2020, the Treasury Secretary announced the Internal Revenue Service (“IRS”) will extend the tax payment deadline for individuals and many business from April 15, 2020, to July 15, 2020.

This move will give taxpayers a three-month reprieve to pay the income taxes they owe for tax year 2019. As summarized by the Treasury Secretary, “If you owe a payment to the IRS, you can defer up to $1 million as an individual – and the reason we are doing $1 million is because that covers pass-throughs and small businesses – and $10 million for corporations, interest-free, and penalty-free for 90 days. All you have to do is file your taxes.”

The announcement, however, was unclear as to whether it would also extend the deadline to file from April 15, 2020, to July 15, 2020. As such, we recommend you file your returns by April 15, 2020. If, however, you are unable to file your taxes by April 15, 2020, you may still request a 6-month extension to file.

Aside from the Treasury Secretary’s announcement on March 17, 2020, the IRS has not released full details on how the delay will work, so we will continue to track it, the IRS’ webpage, and the Treasury Department’s webpage, on COVID-19, and update you as things change. If the federal government provides additional clarity around open items, such as the filing deadline issue mentioned above, we will update you.

Finally, we should note the United States Tax Court (the “Court”) has cancelled all sessions, including its calendared session in Seattle, WA, through the end of April. As of now, the Court’s May 18, 2020, session has not been cancelled. We will continue to follow the Court and post any updates to their schedule. For now, the Court has stated any unresolved cases from cancelled sessions will be scheduled for trial at a later date.

Oregon
On March 13, 2020, the Oregon Department of Revenue (“DOR”) announced tax relief options in light of the COVID-19 pandemic. The announcement addresses personal income tax, the Oregon corporate activity tax (“Oregon CAT”), and various other tax programs.

Personal Income Tax

• The DOR stated it will follow the IRS’ filing and payment due dates for personal income tax. The effects of the Treasury Department’s recent announcement is a bit unclear as the announcement is tied to a specific dollar amount (i.e., individuals up to $1 million or businesses up to $10 million) whereas the DOR generally relies on the IRS’ filing and payment due dates without regard to a specific dollar amount. We anticipate in the near future the DOR will make an announcement addressing the discrepancy and outlining how the Treasury Department’s recent announcement will affect its filing and payment dates.
• The extension of the federal filing and payment due dates for personal income tax, however, will not extend estimated payment due dates for Oregon. Fortunately, the DOR will not impose interest on an underpayment of estimated tax if the DOR determines that by reason of casualty, disaster, or other unusual circumstances the imposition of interest would be against equity and good conscious.
• The DOR has stated taxpayers may file extensions, but has cautioned an extension of filing is not an extension of payment due date.
• The DOR may waive penalties under certain circumstances; however, this also remains unclear.

Oregon CAT

• Initial quarterly payments for the CAT are due April 30, 2020; however, the DOR has indicated it will not assess underpayment penalties to taxpayers making a good faith effort to estimate their first quarter payments as they understand COVID-19 may impact taxpayers’ commercial activity.
• The Oregon CAT education tour has been suspended due to concerns about the spread of COVID-19. Unfortunately, Dan did not attend the tour stop at Mt. Hood Community College, and had planned to attend the (now canceled) stop in Rock Creek. If the DOR provides an online version of the education tour, Dan plans to attend online.

Other Departments

• In its supervisory capacity for cities, counties, and other taxation districts relating to local budget law, the DOR reminds local authorities that they may request, in writing, that the assessor grant an extension of the July 15 deadline for certifying taxes.
• Local governments must adopt their budgets by June 30; which cannot be extended. For alternative means of conducting a public meeting for purposes of gathering public input, please refer to the Oregon Department of Justice’s Public Meeting Law Manual. Any alternate means of conducting public hearings must provide for public comment in real time.

Finally, please note the DOR may extend any statutory period of limitation on any tax that it collects if the IRS takes such an action at the federal level, or if a state-declared emergency impairs the DOR’s ability to take action required within the statute of limitations. In such an event, the DOR will issue an order and file it with the Secretary of State.

Washington
The Washington Department of Revenue (“WA DOR”) maintains a webpage devoted to the “2019 Novel Coronavirus Outbreak (COVID-19) Update” here. That website notes Governor Inslee declared a state of emergency on February 29, 2020, but does not provide any filing deadline relief. Instead, the website points taxpayers to guidance regarding how to file for an extension and how to request a late payment penalty waiver.

Conclusion
We will continue to track federal, state, and local tax issues as events evolve in light of COVID-19.