US Postpones April 15 Tax Deadline By 90 Days

US Postpones April 15 Tax Deadline By 90 Days

In news that will delight millions of Americans – at least those who end up owing Uncle Sam a tax bill instead of getting a refund – the US government will postpone the April 15 tax-payment deadline for tens of millions of taxpayers by 90 days, giving Americans roughly 3 months to pay their 2019 income-tax bills in an unprecedented move.

The IRS, under the authority of President Trump’s national-emergency declaration, will waive interest and penalties as well, Treasury Secretary Steven Mnuchin said at the White House Tuesday. The delay will be available to people who owe $1 million or less and corporations that owe $10 million or less.

The extension was granted to give taxpayers a financial cushion as households and businesses cope with the sudden crash in economic activity caused by the coronavirus outbreak which has brought the US economy to a halt. The move could provide households with hundreds of billions of dollars in temporary liquidity, Mnuchin said last week in previewing the government’s actions.

“We are going to use all the tools we have,” Mr. Mnuchin said on Tuesday. “And what tools we don’t have, we’re going to go to Congress.”

Meanwhile, those who are owed money from Uncle Sam will get it as the IRS will continue to process tax refunds, and Mnuchin urged people who can file their tax returns to do so. Many taxpayers who expect refunds file soon after the IRS opens filing in late January. That is particularly true for low-income households that benefit from the earned-income tax credit, which gives them cash.

About three-quarters of households typically receive refunds, and the IRS will still process returns and send out cash. However, people who file closer to the deadline typically owe money and are waiting to pay. They will benefit the most from Tuesday’s announcement, as will businesses that are worried about their cash flow.

While Mnuchin said last week that the tax deadline would be delayed for all but the superrich, his Tuesday announcement was the first explanation of the length of the delay and how it might work. The tax agency hasn’t yet released full details about how the delay will work.

According to official IRS data, as of March 6, the IRS had received 68 million individual income-tax returns, and since this is less than half of the returns that the IRS normally gets, it means that tens of millions of people can benefit from the relaxed deadlines.

Even if the IRS wanted to process all the tax filings it wouldn’t be able to do so: the tax agency adjusted its own operations during the outbreak, shifting many employees to remote work, according to a message that Commissioner Charles Rettig sent to workers late Friday. In addition, Rettig limited travel, gave employees the option of avoiding face-to-face contacts with taxpayers and stopped those in-person contacts in heavily affected areas such as New York and Seattle.

This article appeared at ZeroHedge.com at:  https://www.zerohedge.com/markets/us-postpones-april-15-tax-deadline-90-days