The IRS has extended to July 15, 2020 the deadline for certain time-sensitive actions for tax-exempt bonds, including filing Form 8038 and paying rebate, if the deadline originally fell on or after April 1, 2020 and before July 15, 2020.

The path to get there is convoluted (this is the tax law we’re talking about, after all), but in Notice 2020-23, the IRS has extended the deadlines for the following actions to July 15, 2020 if they originally fell on or after April 1, 2020 and before July 15, 2020. There are many more deadlines extended, but these are the ones most relevant to our readers:

  1. Filing Form 8038-G or Form 8038 for the issue. In other words, for bond issues that were issued in the first quarter of 2020, which have an 8038 filing deadline of May 15, 2020, those forms are now not due until July 15, 2020. (Good news for those of us with signed 8038’s sitting in the inbox trays that we can’t go empty.)
  2. Making rebate payments and yield reduction payments and filing Form 8038-T.
  3. Making penalty payments in lieu of rebate payments, where the issuer has made that election.
  4. Providing a notice to the IRS that the issuer has established a defeasance escrow for bonds that need to be remediated but cannot be redeemed within 90 days of the action requiring the remediation.
  5. Providing annual income certifications (Form 8703) to the IRS, demonstrating that a multifamily housing project continues to meet the requirement that the applicable percentage of units must be set aside for people below the applicable income threshold.
  6. Providing notice to the IRS of elections with respect to certain expansions of service area for persons engaged in the local furnishing of electric energy or gas to protect the tax-exempt status of the local furnishing bonds.
  7. Filing an election not to issue qualified mortgage bonds if mortgage credit certificates will be claimed under Section 25.
  8. For our 501(c)(3) readers, the deadline to file Form 990, which generally will depend on when the organization’s tax year ends.
  9. Investing proceeds from the sale of property into a qualified opportunity fund under the opportunity zone program in Section 1400Z-2 of the Code.

(The notice also applies to volume cap carryforward elections under Section 146(f), but the deadline for this election will not fall between April 1, 2020 and July 15, 2020.)

The details: Section III.A of Notice 2020-23 (bottom of p. 6 of the linked copy) treats any person performing a time-sensitive action listed in Rev. Proc. 2018-58 that is due to be performed on or after April 1, 2020, and before July 15, 2020 as an “Affected Taxpayer.” Sections 10 and 16 of Rev. Proc. 2018-58 provide specific exempt organization and tax-exempt bond actions that are time-sensitive actions (described above). Section III.C of Notice 2020-23 (middle of p. 8 of the linked copy) says that “Affected Taxpayers” have until July 15, 2020, to perform all Specified Time Sensitive Actions, that are due to be performed on or after April 1, 2020, and before July 15, 2020.

We are still awaiting relief that would allow telephone TEFRA hearings and help issuers buy back their bonds without extinguishing them, as well as action on the other matters that NABL recently magnified in a further letter to Congress and Treasury.