IRS and PBGC Postpone Tax Day for Many Employee Benefit Plan Filings

The Internal Revenue Service and Pension Benefit Guaranty Corporation have extended the due dates for certain federal returns and payments. Affected filings will now be due on July 15, 2020. Interest, penalties, or additional taxes will not begin accruing until July 16, 2020.

Taxpayers wishing to avail themselves of the Internal Revenue Service’s (IRS’s) extended deadlines do not need to apply or even contact the IRS to take advantage of the extension. However, filers wishing to use the Pension Benefit Guaranty Corporation’s (PBGC’s) extended filing relief must notify the PBGC that they are eligible for disaster relief.

IRS Extensions

The IRS previously issued Notices 2020-18 and 2020-20 that postponed the due date for various tax returns and payments to July 15, 2020. On April 9, the IRS issued Notice 2020-23, which provided additional guidance on the extension of certain federal filing deadlines that would have otherwise occurred between April 1, 2020 and July 15, 2020 (the Original Filing Window).

Note: Prior IRS notices required that certain filings have a due date no later than April 15, 2020 to be eligible for the July 15, 2020 extension. However, Notice 2020-23 states that, other than the Form 5500, affected filings are eligible for the July 15, 2020 extension as long as they would have had an original due date that fell within the Original Filing Window.

The following is a nonexhaustive list of affected filings (including any schedules or attachments) and corresponding payments that have an extended filing deadline.

• Form 5500: Note that the extension only applies to plans that either
• have plan years that ended in September, October, or November 2019 (i.e., plan years that would have otherwise required plans to file their 2019 Form 5500 between April 1 and July 15, 2020); or
• have previously filed an extension that would have otherwise made their 2019 Form 5500 due between April 1 and July 15, 2020.

Important Note: Plans that have a July 31, 2020 filing deadline (whether original or under an extension) are still required to file their Form 5500 by July 31, 2020. Such plans may file an extension; see Extensions Beyond July 15, 2020 below.

• Form 1120: US corporation income tax returns and payments for fiscal and calendar year corporations.
• Form 1065: US partnership income tax returns for fiscal and calendar year partnerships.
• Form 990-T: Exempt organization business income tax returns and payments.
• Form 990-W: Quarterly estimated tax on unrelated business taxable income for tax-exempt organizations and payments.
• 2016 amended returns to claim refunds.
• Filings of a claim or lawsuit for credit or tax refund, petition, or review of a decision with the US Tax Court.

Notice 2020-23 also acknowledged that most IRS employees are sheltering in place like the rest of the country, and therefore do not have access to their files or IRS resources. As a result, taxpayers who are undergoing current IRS examinations or who have appeals pending before the Independent Office of Appeals should anticipate up to a 30-day delay in their correspondence with the IRS and the Independent Office of Appeals.

Extensions Beyond July 15, 2020

Taxpayers who need additional time to file, beyond July 15, 2020, are eligible to further extend their filing deadline by submitting the appropriate form by July 15, 2020. However, no extensions will be granted beyond the original statutory or regulatory extension dates. For example, individual taxpayers may request an extension to file their 2019 federal income tax return (and make any corresponding payments) by filing the appropriate form by July 15, 2020, and their 2019 federal income tax return will be due on October 15, 2020.

In addition to extending the deadline for corporations, partnerships, and tax-exempt entities to file tax returns, the IRS postponed the otherwise applicable deadline for the following time-sensitive “actions” that would have required the taxpayer to take some action during the Original Filing Window:

• 83(b) elections
• Qualified plan loan repayments (note that plan loan relief was also made available to certain individuals under the CARES Act; see our prior LawFlash)
• Required minimum distributions
• Distribution of excess deferrals
• Corrective distributions for excess contributions/excess aggregate contributions
• 60-day period for completing rollovers

PBGC Extensions

The PBGC announced on April 10 that it was extending upcoming due dates for certain payments and filings that would have otherwise been due within the Original Filing Window. The PBGC’s disaster relief announcement explained that when the IRS grants relief by extending certain filing deadlines due to a major disaster, the PBGC automatically extends corresponding deadlines in concert with the IRS. Accordingly, the PBGC announced that the IRS triggered the extension of certain filing and payment deadlines when it extended the deadline for filing certain Forms 5500.

The PBGC’s disaster relief announcement provides additional time to pay PBGC premiums and extensions for the following filings, provided that such filing, but for the disaster relief, would have been due within the Original Filing Window:

• ERISA 4010 filings: Financial and actuarial information reporting for certain underfunded pension plans.
• Certain reportable events that are not otherwise excluded under the PBGC’s Exceptions List (see below) (e.g., a controlled group breakup for which a post-event notice is required to be filed).
• Comprehensive premium filings (and payment of such premiums).
• Any filings that have deadlines that are dependent on the filing of a form that has been postponed pursuant to the disaster relief policy. The disaster relief policy provides that the “end of the relief period” (i.e., July 15, 2020) should be used as the calculating date instead. For example, under ERISA Section 4010, certain actuarial information must be filed within 15 days of the date the plan’s Form 5500 is filed. Pursuant to the disaster relief policy, such filing should be made within 15 days of the end of the relief period.

Filers wishing to take advantage of these extended filing deadlines must notify the PBGC as soon as reasonably possible by emailing the PBGC at premiums@pbgc.gov and stating (1) the number of the applicable IRS News Release, (2) plan name, (3) EIN, (4) plan number, and (5) filer’s name and address.

PBGC’s Exceptions List

The following filings or actions are not eligible for relief under the PBGC’s disaster relief policy:

• Form 10-Advance: Advance notice of reportable events under ERISA Section 4043
• Form 200: Notice of failure to make required contributions under ERISA Section 303(k)
• Post-event notices for the following five reportable events under ERISA Section 4043:

• Failure to make required contributions under $1 million
• Inability to pay benefits when due
• Liquidation
• Loan default
• Insolvency or similar settlement

• Actions related to distress terminations for which the PBGC has issued a distribution notice

Coronavirus COVID-19 Task Force

For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. We also have launched a resource page to help keep you on top of developments as they unfold. If you would like to receive a daily digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Boston
Lisa Barton

Chicago
Dan Salemi

New York
Craig Bitman
Handy Hevener

Philadelphia
Bob Abramowitz
Amy Pocino Kelly
Mark Simons

Pittsburgh
John Ferreira
Matthew Hawes
Randy Tracht

Washington, DC
Rosina Barker
Althea Day
Steve Johnson
Greg Needles
Jonathan Zimmerman