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IRS Clarifies BEAT, Transition Tax Deadlines Delayed To July 15

By Natalie Olivo · March 24, 2020, 7:49 PM EDT

The IRS clarified Tuesday that payments owed under the repatriation provision and the base erosion and anti-abuse tax are due on the new July 15 deadline, which was moved from April 15 in light of the novel coronavirus pandemic.

Companies have three extra months to make payments under the BEAT and the transition tax, two measures enacted as part of the Tax Cuts and Jobs Act in late 2017, according to guidance posted on the Internal Revenue Service’s website. The agency said it was clarifying how requirements under these and other measures were impacted by the recent extension of payment and filing deadlines.

Earlier this month, the IRS issued a notice that pushed the deadline for paying taxes, but not for filing returns, to July 15. Following pressure from lawmakers in Congress, the IRS on Friday released a second notice that extended the filing deadline as well.

In the guidance issued Tuesday, the IRS said companies that had their April 15 deadline postponed to July 15 now have until then to make payments and file their returns regarding the BEAT. Designed as a guardrail to prevent companies from stripping earnings out of American shores, the measure limits deductions on payments by a U.S. business to related parties abroad.

The guidance also clarified that the new deadline applies to installment payments made under the TCJA’s transition tax that are associated with a 2019 return. The repatriation provision imposed a one-time mandatory transition tax on overseas income that companies could pay over the course of eight years.

--Additional reporting by Joshua Rosenberg. Editing by Neil Cohen.

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