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In Notice 2020-35, the IRS expanded earlier relief postponing filing and payment deadlines to include certain employment taxes and employee benefit plan actions due to be performed on or after March 30, 2020, and before July 15, 2020.

The deadline for most actions is July 15, 2020, with certain actions having differing deadlines, as noted later.

If the Employee Retirement Income Security Act of 1974 (ERISA) has provisions paralleling the relevant tax code provisions, those deadlines are also postponed.

In addition, the Notice temporarily waives the requirement that Certified Professional Employer Organizations (CPEOs) file certain employment tax returns and their accompanying schedules on magnetic media. Individual requests for waiver do not need to be submitted, but the waiver applies only to Forms 941 filed for the second, third, and fourth quarter of 2020 and only to Forms 943 filed for calendar year 2020, and their accompanying schedules.

New notice amplifies earlier relief

Previously, the IRS gave (Notice 2020-23) taxpayers that were affected by the COVID-19 emergency and had a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, until July 15, 2020, to file returns and make payments without penalties or interest (see Tax Alert 2020-0961). The relief applied to persons who perform time-sensitive actions under Revenue Procedure 2018-58.

Notice 2020-35 amplifies the definition of "affected taxpayers" to include those who perform the time-sensitive actions specified in the new Notice. These affected taxpayers include plan sponsors, administrators, participants and beneficiaries.

Notice 2020-35 also amplifies the definition of "time-sensitive actions," due to be performed on or after March 30, 2020, and before July 15, 2020, to include the following:

• Correction of employment tax reporting errors using the interest-free adjustment process under IRC Sections 6205 and 6413
• Filing Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, and payment of the associated excise taxes
• Defined benefit pension plans: Under IRC Section 412, application for a funding waiver
• Multiemployer defined benefit pension plans: Under IRC Section 432, certification of funding status and notice to interested parties; adoption of, and notification to the bargaining parties of, a funding improvement plan or rehabilitation plan; annual update of a funding improvement plan or rehabilitation plan and their contribution schedules, and the filing of those updates with the Form 5500 annual return
• Cooperative and small employer charity pension plans (CSEC plans): Under IRC Section 433, making contributions and quarterly installments, adopting a funding restoration plan and certifying funding status
• IRS employee plans programs: Extension of initial remedial amendment period for 403(b) plans to June 30, 2020 (instead of March 31, 2020); extension of pre-approved defined benefit plans action to July 31, 2020; implementation of all corrective actions under a voluntary correction program compliance statement; request for approval of a substitute mortality table
• Exempt organizations: Electronic submissions of Form 990-N under IRC Section 6033(i); time for commencing a suit for declaratory judgment under IRC Section 7428
• Form 5498: Filing and furnishing Form 5498, IRA Contribution Information, Form 5498-ESA, Coverdell ESA Contribution Information, and Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, to August 31, 2020

Implications

Some taxpayers were surprised that the relief provided in Notice 2020-35 was not included in prior relief packages, so the new notice will be welcomed by those taxpayers. Notice 2020-35 does not, however, postpone any deadlines for Form 941, Employer's QUARTERLY Federal Tax Return. Therefore, employers must continue to file Form 941 each quarter by the normally applicable deadline.

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