Coronavirus: New IRS and Maryland Tax Deadlines and Small Business Assistance

Due to the Coronavirus Pandemic (COVID-19), the IRS, State of Maryland, and local governments have all been acting to adjust deadlines and assist taxpayers.  This article will address many of the actions and activities currently ongoing.

Tax Deadlines and the Coronavirus Pandemic

As a direct result of the current Coronavirus Pandemic (COVID-19), the April 15, 2020 tax return filing and payment deadlines for the IRS and Maryland previously have been delayed. However, the IRS delay of the 2019 tax return and payment ONLY APPLIES to (1) tax year 2019 and (2) filings due on April 15, 2019. If you are a taxpayer that falls into these categories, and you still cannot file by the July 15, 2020 deadline, you will need to file and extension to file and still make the required payments that would have been due on April 15, 2020 on July 15, 2020.  If you have already filed the 2019 tax return and you owe taxes, you have until July 15, 2020 before penalties and interest will accrue.

If the taxpayer is (1) a business with a May 15 or June 15 deadline or (2) does not file on April 15 for any reason, those filings HAVE NOT been extended and are still due on the initial filing deadline.

In addition, regular filing and payment deadlines for employment taxes (social security, Medicare, and withholding) excise taxes, estate and gift taxes HAVE NOT been extended. It is important for taxpayers to remember that the withholding taxes must be timely filed and paid.  If they are not paid, interest and penalties will accrue. In addition, the individual who is responsible for the payment of these taxes can be held personally liable for a portion of the tax due.

Taxpayers should be aware that the delay in payments only applies to the 2019 tax year and not past year’s taxes.  If taxpayers have a current installment agreement with IRS taxpayers are still required to make those payments.

Coronavirus Stimulus Package & 2018 Tax Return

The IRS has warned taxpayers about the pending legislation, the Coronavirus Stimulus Package, and that they may not receive a stimulus check if they have not filed their 2018 tax return.  The stimulus package has a threshold and the checks can only be issued if the 2018 or 2019 tax returns have been filed.  Therefore, those who have not yet filed the 2018 tax return are urged to file these overdue tax returns immediately.  In addition, those who are due a refund for 2016 still need to file those tax return by April 15, 2020 as the statute of limitations to receive a refund for that tax year HAS NOT been extended.

IRS Focus During Coronavirus

The IRS has currently scaled back its operations and continues to evaluate its operations with a focus on the mission-critical activities.  All in person assistance has been suspended and limited telephone assistance is available.  Overall many sectors of the IRS are still operating and taxpayers should not assume that the IRS is no longer working their case or that the matter has been suspended.  Taxpayers should still communicate with the IRS on their cases to ensure that there is no risk for collection activity.

Comptroller of Maryland and Coronavirus

The Comptroller of Maryland has also delayed Maryland tax return filings and payments for the 2019 tax year until July 15, 2020.  The Comptroller’s office is also suspending most collection activity during this time. It will not garnish bank accounts or wages, issue notices of liens, suspend professional licenses, non-renewal of driver’s licenses or any other enforced collection activity.  If you are currently being garnished and the garnishment is not lifted, you should contact the Comptroller’s office as soon as possible.  This will continue in place until 30 days after the emergency declaration by the Governor has been lifted.  For those taxpayers who currently have installment agreements and cannot afford to pay, they are encouraged to contact the Comptrollers office to work out an extension.  Taxpayers should be aware that if they receive a notice from the Comptroller’s office they should contact the number on the letter.

The Comptroller of Maryland is also extending the time to file and pay sales and use tax returns, withholding tax returns, admission and amusement taxes, alcohol taxes and many other monthly due taxes for February, March and April 2020.  These months will now be due on June 1, 2020.  Taxpayers are reminded to still file separate tax returns for each month and not to combine the months.  Taxpayers should also be cautious with the funds collected for these taxes and ensure they are paid over to the Comptroller no later than June 1, 2020.  Taxpayer who do not file and pay these taxes will be assessed penalties and interest on the amount due.  In addition, the individual who is responsible for the payment of these taxes can be held personally liable if they do not pay these taxes over to the Comptroller of Maryland when due.

Montgomery County, Maryland Coronavirus Stimulus 

Montgomery County Maryland is currently working on a proposal to assist small businesses. The proposal currently would be available for business with less than 100 employees. Companies may be able to apply for grants up to $75,000.  The grants would be available to assist businesses on setting up remote programs so employees could telecommute. This program is still and development and updated will be provided as they develop.

Regardless of any activities  it is important for taxpayers to file tax returns or file extensions as soon as possible to start the time frame for the IRS or state government to issue collections. If a taxpayer fails to promptly address an problem raised by the IRS, it could be impossible for a tax attorney to undo all the damage in the future. Contact Robb Longman today at (301) 291-5027 to schedule a phone consultation. Our experienced IRS tax attorneys, based in Bethesda, Rockville, and Washington, DC can help to resolve tax issues (whether related to COVID-19 Pandemic or not) as efficiently as possible. Mr. Longman works to devise strategies to help his clients minimize their taxes in their business or personal transactions.