IRS gives American citizens living and working in the UK an extension for their Federal tax returns

All American citizens, including those living and working in the UK, have been given an extension from April until July to make their returns, says Adam Smith.

The effect of Coronavirus on day-to-day life had caused US taxpayers to become increasingly concerned regarding their tax affairs. Not only was the information required to complete 2019 tax returns taking longer than usual as a result of the crisis, but the cashflow required for the usual April 15 tax payments was also an issue. Either the cash was simply not available or there were fears that making large payments in April might endanger solvency in the coming uncertain months.

The Internal Revenue Service (IRS) has announced an extended due date of July 15 2020 for filing 2019 Federal Income Tax returns and paying any tax due. The date for making the first-quarter estimated tax payment for 2020 has also moved to July 15, 2020.

However, it is important to note the following exceptions:

There is currently no extension of time for filing any Federal information returns with an April 15 due date.
For a taxpayer with an instalment of the 2017 one-off ‘repatriation tax’ that is due on April 15 2020, there is no extended payment date for that amount.
The filing date for Reports of Foreign Bank and Financial Accounts (FBAR) is not within the remit of the IRS and thus not impacted by the IRS Notice.
A non-resident alien submitting US Federal Income Tax Returns on Form 1040-NR, such as a UK national with income arising from a source in the USA, may not be covered by the July 15 extensions. The IRS Notice only impacts those 2019 tax returns and 2020 estimated payments for which the statutory due date is April 15, so an extension may still need to be filed.

This is an important extension that gives both US taxpayers and their advisors additional time to prepare and file tax returns, that would ordinarily be due on April 15. The additional time to pay taxes will be welcome relief to Americans residing all over the world.

Would you like to know more?

If you would like to discuss any of the above guidance or have other queries, please contact Adam Smith or your usual Blick Rothenberg contact.

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