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06.01.2020 | Legal Advisory

On May 28, 2020, the Internal Revenue Service released Notice 2020-35, providing additional administrative relief with respect to certain employment taxes, employee benefit plans, exempt organizations, individual retirement arrangements, Coverdell education savings accounts, health savings accounts, and Archer and Medicare Advantage medical savings accounts. In this advisory, we discuss how the relief provided for in Notice 2020-35 amplifies the definition of “affected taxpayer” and “specified time-sensitive actions” as provided in Notice 2020-23 issued on April 9, 2020. Generally, the revised deadline for an “affected taxpayer” to perform a “time-sensitive action” is July 15, 2020, unless otherwise stated in Notice 2020-35.

For purposes of the relief provided with respect to “specified time-sensitive actions,” “affected taxpayers” include:

• With respect to employment taxes, employers who perform a “time-sensitive action”
• With respect to employee benefit plans, the plan or any sponsor, administrator, participant, beneficiary, disqualified person, or other person with respect to such plan who performs a “time-sensitive action”
• With respect to exempt organizations, those persons performing a “time-sensitive action”
• Filers of Form 5498, IRA Contribution Information, Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, Form 5498-ESA, Coverdell ESA Contribution Information for whom filing the form is a “time-sensitive action”

The “time-sensitive actions” to which relief applies include:

• Employment Tax Reporting Errors. Actions to correct employment tax reporting errors using the interest-free adjustment process pursuant to Section 6205 and 6413 of the Internal Revenue Code of 1986, as amended (the “Code”)
• Defined Benefit Pension Plan Funding Waiver. Application for a funding waiver under Section 412(c) of the Code for a defined benefit pension plan that is not a multiemployer plan
• Multiemployer Defined Benefit Plan Actions. Actions due to be performed with respect to a multiemployer defined benefit plan described in (i) Section 432(b)(3) of the Code for the certification of funded status and the notice to interested parties of that certification, (ii) Sections 432(c)(1) and 432(e)(1) of the Code for the adoption of, and the notification to the bargaining parties of the schedules under, a funding improvement plan or rehabilitation plan, and (iii) Sections 432(c)(6) and 432(e)(3) of the Code for the annual update of a funding improvement plan and its contribution schedules, or rehabilitation plan and its contribution schedules, and the filing of those updates with the Form 5500 annual report
• Small Employer Charity Pension Plan Actions. Actions due to be performed with respect to a cooperative and small employer charity pension plan described in (i) Section 433(c)(9) of the Code for making the contribution required to be made for the plan year, (ii) Section 433(f)(3)(B) of the Code for making required quarterly installments, (iii) Section 433(j)(3) of the Code for the adoption of a funding restoration plan, and (iv) Section 433(j)(4) of the Code for the certification of funded status
• Form 5330. Filing of Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, and payment of the associated excise tax
• Section 403(b) Plan Amendments. With respect to the remedial amendment period and plan amendment rules for Section 403(b) plans described in Rev. Proc. 2017-18 and Rev. Proc. 2019-39, actions that are otherwise required to be performed on or before March 31, 2020 with respect to form defects or plan amendments. The deadline for such actions is postponed to June 30, 2020
• Defined Benefit Plan Actions. With respect to pre-approved defined benefit plans, the deadline is postponed until July 31, 2020 for (i) adoption of a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List, (ii) submission of a determination letter application under the second six-year remedial amendment cycle, and (iii) actions that are otherwise required to be performed with respect to disqualifying provisions during the remedial amendment period that would otherwise end on April 30, 2020
• Voluntary Correction Program Corrective Actions. With respect to a compliance statement issued under the Voluntary Correction Program, implementation of all corrective actions required by the compliance statement
• Substitute Mortality Table. Request for approval of a substitute mortality table in accordance with Section 430(h)(3)(C) of the Code
• Form 990-N. With respect to exempt organizations (i) electronic submissions of Form 990-N, Electronic Notice (e-Postcard) for Tax Exempt Organizations Not Required to File Form 990 or Form 990-EZ, and (ii) time for commencing a suite for declaratory judgement pursuant to Section 7428 of the Code
• Form 5498 Series. With respect to the Form 5498 series, the due date for filing and furnishing the forms is postponed to August 31, 2020.

What’s Next?

We are continuing to monitor updates from the IRS regarding the extension of deadlines and will keep you updated on future developments.

This advisory was prepared by Melissa Sampson McMorrow in Nutter’s Tax Department. If you would like additional information, please contact Melissa or your Nutter attorney at 617.439.2000.