IRS Provides Further COVID-19 Relief Related To Postponed Deadlines For Time Sensitive Actions

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On May 28, 2020, the Internal Revenue Service (IRS) released an advanced version of Notice 2020-35, which amplifies the relief it had previously provided from deadlines for certain time-sensitive actions.  The relief offered by Notice 2020-35 is provided because of the ongoing COVID-19 pandemic and is in addition to the relief provided by Notice 2020-18, Notice 2020-20, and Notice 2020-23.

Specifically, Notice 2020-35 amplifies the definition of “affected taxpayer” to include the performance of “time-sensitive actions” that are due to be performed on or after March 30, 2020, and before July 15, 2020, concerning:

  • Certain employment taxes;
  • Employee benefit plans (including section 403(b) plans, government section 457(b) plans, SEP plans, or SIMPLE IRA plans);
  • Exempt organizations; and
  • Forms 5498, 5498-SA, or 5498-ESA.

Notice 2020-35 also amplifies the definition of “time-sensitive actions” to include:

  • The correction of employment tax reporting errors using the interest-free adjustment process under the Internal Revenue Code of 1986 (the “Code”);
  • Funding waivers for defined benefit plans that are not multiemployer plans under Code Section 412(c);
  • Actions for multiemployer defined benefit plans;
  • Actions for cooperative and small employer charity pension plans (CSEC plans);
  • Filing Form 5330 and the payment of associated excise taxes;
  • The initial remedial amendment period and plan amendment rules for 403(b) pans;
  • The second remedial amendment period for pre-approved defined benefit plans originally scheduled to end on April 30, 2020;
  • The implementation of corrective actions under the IRS Employee Plans Compliance Resolution System (EPCRS) and compliance statements issued under the Voluntary Correction Program (VCP);
  • Requests for approval of a substitute mortality table under Code Section 430(h)(3)(C);
  • Electronic submissions of exempt organizations’ Form 990-N under Code Section 6033(i) and the time for commencing a suit for declaratory judgment under Code Section 7428; and
  • The due date for filing and furnishing the Forms 5498, 5498ESA and 5498-SA, is postponed to August 31, 2020. Penalties regarding such postponed filings will begin to accrue on September 1, 2020.

Notice 2020-35 also provides a temporary waiver of the requirement that all Certified Professional Employer Organizations (CPEOs) file certain employment tax return filings and accompanying schedules, on magnetic media (including electronic filing).  This temporary waiver applies to Forms 941 (and its accompanying schedules) filed in the second, third, and fourth quarters in 2020 and Forms 943 (and its accompanying schedules) for the 2020 calendar year.

With time-sensitive actions regarding provisions of the Code for which there are parallel provisions in the Employee Retirement Income Security Act of 1974 (ERISA), the relief provided by Notice 2020-35 also applies to the parallel provisions under ERISA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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