Virtual (Videoconference) Probate Procedures

Posted on by March 31, 2020

Since publishing the news that Lehigh County has established a “virtual probate” process by videoconferencing, it’s been learned that five other counties have published similar procedures. The list (as of 3/31/2020) is as follows:

Most of the procedures require the participation of a lawyer, and some of the procedures seem to require that the lawyer and clients (personal representatives) all participate in the conference call from the same location, which would seem to defeat the “social distancing” goal of the videoconferencing process. That might not be the intention, or the procedures may change.

This situation will be changing quickly, and so the home pages of the relevant county should be checked before starting the probate process (see our directory of Registers of Wills), and a telephone call or email may be necessary or appropriate.

Virtual Probate in Lehigh County

Posted on by March 31, 2020

Lehigh County has announced a new procedure for the probate of wills by video conferencing, effective 3/30/2020.

The Montgomery County Bar Association reports that its Register of Wills is considering a similar procedure, but nothing appears on the Register’s website yet.

Perhaps other counties will follow suit.

[3/31/2020 Update: See “Virtual (Videoconference) Probate Procedures” for links to other counties known to have created similar procedures.]

Gift Tax Return and Payment Deferral

Posted on by July 5, 2020

In Notice 2020-20, 2020-16 I.R.B. 660 (4/13/2020), the Internal Revenue Service has “amplified” Notice 2020-18, 2020-15 I.R.B. 590 (4/6/2020), to provide the same three month deferral for gift tax (and generation-skipping tax) returns and payments as was previously allowed for income tax returns and payments.

The new notice states that, if a taxpayer should want an additional three month extension, to October 15, 2020, in which to file the gift tax return, the taxpayer can file Form 8892 by July 15, but any Federal gift and generation-skipping transfer tax payments postponed by the notice will still be due on July 15.

Remote Notarization Approved Temporarily for Real Estate Transactions

Posted on by March 27, 2020

Governor Wolf has approved a temporary suspension of the personal appearance requirement for notarizations in certain real estate transactions. The Pa. Department of State has issued a press release with the details on how notaries can use these new procedures.

Meanwhile, the Pennsylvania legislature is working on a more general and permanent solution with H.R. 1564, which has already passed the House and is expected to be approved by the Senate as quickly as possible.

Pennsylvania Income Tax Returns and Payments Deferred to July 15

Posted on by March 24, 2020

On March 21, the Pa. Department of Revenue announced that Pennsylvania income tax returns and income tax payments for the year 2019 will be deferred to July 15. This is similar to the previous announcements by the Internal Revenue Service for federal income tax returns and payments.

Estimated income tax payments for the first and second quarters of 2020 are also deferred to July 15. (The federal deferral only applies to first quarter estimated tax payments.)

There is a web page for current Department of Revenue alert details for coronavirus information.

For information on filing deadlines for other states, see this chart from the American Institute of Certified Public Accountants.

Suspending Court and Law Firm Operations

Posted on by March 24, 2020

The response to the COVID-19 pandemic in Pennsylvania has led to actions by the Supreme Court and Governor affecting court operations and the practice of law in Pennsylvania:

Some general observations about these orders:

  • Law firms are generally required to cease operations. That does not mean that lawyers can’t practice law by email or telephone, because the Governor’s order does not apply to “virtual or telework operations.” Whether someone can go into an office to collect and process income mail is not clear. If the goal of the order is social distancing, then what is prohibited is having two or more lawyers or employees in the same office at the same time, and processing mail is acceptable. But if there is a goal of reducing travel, then sending an employee into an office to collect mail is not acceptable. Perhaps the solution is temporary change of address orders (which might then overwhelm the U.S. Postal Service).
  • A law firm can operate to the extent needed for an emergency guardianship or other “essential functions” of the courts.
  • Although tax preparation has been classified as life sustaining, that classification seems to have been undercut by Notice 2020-18, which allows for a deferral of federal income tax returns and payments until July 15. It therefore seems contrary to the spirit of the Governor’s order for a law firm to continue to operate to prepare income tax returns for individuals, estates, or trusts.

Gift Tax Returns Not Deferred

Posted on by July 5, 2020

[3/27/2020 Update: Notice 2020-20, 2020-16 I.R.B. 660 (4/13/2020), “amplifies” Notice 2020-18 and allows the same three month deferral for gift tax returns and gift tax payments that was provided by Notice 2020-18 for income tax returns and payments.]

As explained in an earlier posting, IRS Notice 2020-18 has deferred all income tax return filings and income tax payments until July 15 due to the COVID-19 pandemic.

Some practitioners have wondered if Notice 2020-18 also defers the due date for federal gift tax returns because they are also due on April 15 and an extension of time to file an income tax return also extends the time to file a gift tax return. Unfortunately, that seems unlikely, for two reasons:

  1. The notice itself is explicitly limited to federal income tax relief. It says that the relief that is provide is “solely” for federal income tax payments and “Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year.” It also states that “No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.”
  2. The statutory authority for the notice (20 U.S.C. § 7508A(a)) does not speak of “due dates” or “extensions” but allows the Secretary to “specify a period of up to 1 year that may be disregarded” in determining whether returns or payments were made within the time allowed, or in determining interest or penalties. So, technically speaking, the due date for income tax returns is still April 15 but the period from April 15 to July 15 is being disregarded.

Because of the absence of any certainty about the effect of the notice on gift tax returns, it is suggested that Form 8892 be filed if a gift tax return is required and can’t be filed by April 15. (It is also still possible to file a Form 4868 to get a six month extension of time to file both the federal income tax return and federal gift tax return.)

[3/24/2020 Update: The Internal Revenue Service has published a FAQ (“Filing and Payment Deadlines Questions and Answers“) that confirms that the time for filing gift tax returns and making gift tax payments has not be deferred. See Q7.]

Three Month Deferral for Income Tax Returns and Payments

Posted on by July 5, 2020
In Notice 2020-18, 2020-15 I.R.B. 590 (4/6/2020), the Internal Revenue Service has announced that, because of the COVID-19 pandemic, income tax returns and payments that are now due on April 15 can be deferred until July 15 without any penalties or interest. The deferral of income tax payments applies to both tax payments for 2019 and estimated tax payments for 2020. This notice supersedes Notice 2020-17, which provided for a deferral of income tax payments but not a deferral of the filing of income tax returns. Interest and penalties may apply after July 15, but the period from April 15 to July 15 will be excluded from any interest or penalty calculations. And, unlike Notice 2020-17, there is no dollar limitation on the amount of tax that may be deferred. Unlike Notice 2020-17, this notice explicitly applies to estates and trusts as well as individuals and corporations. According to Notice 2020-18, the relief is limited to income tax returns and payments due on April 15, and does not apply to any other tax payment or type of return. There is (as yet) no similar relief for Pennsylvania income tax filings or payments. There is a web page for current Department of Revenue alert details for coronavirus information. (Note: This changed on 3/21/2020.) [3/24/2020 Update: The Internal Revenue Service has published a FAQ (“Filing and Payment Deadlines Questions and Answers“) with additional information about the application of Notice 2020-18.]

Filing Inheritance Tax Returns during the Pandemic

Posted on by March 19, 2020

The Pa. Department of Revenue recently posted the following on its website:

“Due to the recent closing of commonwealth and county office buildings to help prevent the spread of COVID-19, the Department of Revenue is aware that taxpayers have been unable to meet their Inheritance Tax filing and payment obligations. To address these concerns, the department is asking County Register of Wills offices to implement the following procedures when their operations resume:

“* If a taxpayer is filing a return or making a payment and indicates that either was due during the timeframe that offices were closed, please place a date received as of March 12, 2020, on the return and the receipt.

“* In addition, the department is making system modifications to not apply penalties for payments received late, that otherwise would have been timely during office closures.”

Three Month Deferral for Federal Income Tax Payments

Posted on by March 20, 2020

Note: Notice 2020-17 was superseded by Notice 2020-18.

In Notice 2020-17, the Internal Revenue Service has announced that, because of the COVID-19 pandemic, income tax payments that are now due on April 15 can be deferred until July 15 without any interest or penalties. This applies to both tax payments for 2019 and estimated tax payments for 2020, but the deferral is limited to $1 million for individuals and $10 million for corporations.

There is (as yet) no deferral of the filing deadline, so taxpayers must either file returns by April 15 or file for an extension of time to file.

Interest and penalties may apply after July 15, but the period from April 15 to July 15 will be excluded from any interest or penalty calculations.

It is believed that this relief applies to estates and trusts as well as individuals and corporations.

There is (as yet) no similar relief for Pennsylvania income tax filings or payments.