n-20-35.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Additional Administrative Relief with Respect to Deadlines Applicable to Employment
Taxes, Employee Benefits, and Exempt Organizations Affected by the Ongoing
Coronavirus Disease 2019 Pandemic

Notice 2020-35

I. PURPOSE
On March 13, 2020, the President of the United States issued an emergency
declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act
in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic
(Emergency Declaration). The Emergency Declaration instructed the Secretary of the
Treasury “to provide relief from tax deadlines to Americans who have been adversely
affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).”
Pursuant to section 7508A of the Internal Revenue Code (Code), the Internal
Revenue Service (IRS) is postponing deadlines for certain time-sensitive actions on
account of the COVID-19 emergency. This relief is provided with respect to certain
employment taxes, employee benefit plans, exempt organizations, individual retirement
arrangements (IRAs), Coverdell education savings accounts, health savings accounts
(HSAs), and Archer and Medicare Advantage medical saving accounts (MSAs) that,

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with certain exceptions, are due to be performed on or after March 30, 2020, and before
July 15, 2020. In addition, pursuant to § 31.3511-1(g)(2)(ii) of the Treasury Regulations
(Regulations), the IRS is providing a temporary waiver of the requirement that Certified
Professional Employer Organizations (CPEOs) file certain employment tax returns and
their accompanying schedules on magnetic media. The relief provided in this notice is
provided on account of the ongoing COVID-19 pandemic and is in addition to the relief
provided under Notice 2020-18, 2020-15 IRB 590, Notice 2020-20, 2020-16 IRB 660,
and Notice 2020-23, 2020-18 IRB 742.

II. BACKGROUND
A. COVID-19 Disaster Relief – Prior Postponement of Certain Deadlines
and Other Requirements Pursuant to Section 7508A

Section 7508A provides the Secretary with the authority to postpone the time for
performing certain acts under the internal revenue laws for a taxpayer determined by
the Secretary to be affected by a federally declared disaster as defined in section
165(i)(5)(A). Pursuant to section 7508A(a), a period of up to one year may be
disregarded in determining whether the performance of certain acts is timely under the
internal revenue laws.
Section 7508A(b) provides that, in the case of a pension or other employee
benefit plan, or any sponsor, administrator, participant, beneficiary, or other person with
respect to such a plan, affected by a federally declared disaster or a terroristic or
military action described in section 7508A(a), the Secretary may specify a period of up
to one year that may be disregarded in determining the date by which any action is

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required or permitted to be completed. If the Secretary exercises that authority, no plan
will be treated as failing to be operated in accordance with its terms solely because the
plan disregards any period pursuant to this relief.
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Following the Emergency Declaration, the Department of the Treasury (Treasury
Department) and the IRS published guidance utilizing the authority provided under
section 7508A for the Secretary of the Treasury or his delegate (Secretary) to postpone
certain deadlines in the case of a federally declared disaster.
On March 18, 2020, the Treasury Department and IRS issued Notice 2020-17,
2020-15 IRB 590, providing relief under section 7508A(a), which postponed the due
date for certain federal income tax payments from April 15, 2020, until July 15, 2020.
On March 20, 2020, the Treasury Department and IRS issued Notice 2020-18, which
superseded Notice 2020-17 and provided expanded relief, postponing the due date for
filing federal income tax returns and for making federal income tax payments from April
15, 2020, until July 15, 2020. On March 27, 2020, the Treasury Department and the
IRS issued Notice 2020-20, which amplified Notice 2020-18 and provided additional
relief, postponing certain federal gift (and generation-skipping transfer) tax return filings
and payments from April 15, 2020, until July 15, 2020.
On April 9, 2020, the Treasury Department and the IRS issued Notice 2020-23,
which provided additional relief pursuant to the Emergency Declaration. Notice 2020-23

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Sections 518 and 4002(i) of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406,
88 Stat. 829 (1974), as amended (ERISA), similarly authorize the provision of relief under Titles I and IV
of ERISA.

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provides relief for persons with a federal tax payment obligation specified in section III.A
of the notice (Specified Payment), or a federal tax return or other form filing obligation
specified in section III.A of the notice (Specified Form), due to be performed (originally
or pursuant to a valid extension) on or after April 1, 2020, and before July 15, 2020
(Affected Taxpayers). Notice 2020-23 also provides that the term Affected Taxpayer
includes any person who performs a time-sensitive action listed in either § 301.7508A-
1(c)(1)(iv) - (vi) of the Regulations or Rev. Proc. 2018-58, 2018-50 IRB 990, due to be
performed (originally or pursuant to a valid extension) on or after April 1, 2020, and
before July 15, 2020 (Specified Time-Sensitive Action). Thus, for example, under
Notice 2020-23, Affected Taxpayers include persons described in section 7508A(b),
such as sponsors or plan administrators of qualified retirement plans, due to perform a
Specified Time-Sensitive Action. In addition, Affected Taxpayers include exempt
organizations with a federal tax payment, federal tax return, or other form filing
obligation specified in section III.A of Notice 2020-23, and exempt organizations
performing time-sensitive acts listed in Rev. Proc. 2018-58, which includes the filing of
Form 990 series annual information returns.
B. Employment Taxes

1. Interest-free adjustments to correct employment tax reporting errors

For purposes of this notice, “employment tax” means Federal Insurance
Contributions Act (FICA) tax imposed on employees by sections 3101(a) and 3101(b)
and on employers by sections 3111(a) and 3111(b); Railroad Retirement Tax Act

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(RRTA) tax imposed on employees by sections 3201(a) and 3201(b) and on employers
by sections 3221(a) and 3221(b); and income tax withholding (ITW) imposed by section
3402. To the extent other types of withholding are treated as ITW under section
3402(a) (such as gambling withholding, pension withholding, and backup withholding as
set forth in sections 3402(q)(7), 3405(f), and 3406(h)(10), respectively), these other
types of withholding are also included in the term “employment tax.”
Sections 6205 and 6413 permit interest-free adjustments to correct employment
tax reporting errors, and sections 31.6205-1, 31.6413(a)-1 and 31.6413(a)-2 of the
Regulations provide related rules for making these adjustments. Notice 2020-23
provided relief for filing claims for credit or refund of any tax, including employment tax,
due to be filed on or after April 1, 2020, and before July 15, 2020. However, Notice
2020-23 did not provide relief for employers making interest-free adjustments to correct
employment tax reporting errors.
2. Electronic filing requirements for CPEOs
Section 31.3511-1(g)(2) provides that CPEOs must file on magnetic media any
Form 941, Employer's QUARTERLY Federal Tax Return, and Form 943, Employer's
Annual Federal Tax Return for Agricultural Employees, along with all required
accompanying schedules. However, § 31.3511-1(g)(2)(ii) provides that the IRS may
waive the requirements to file on magnetic media in cases of undue economic hardship.
Individual requests for waivers from CPEOs must be made in accordance with
applicable guidance. The term “magnetic media” generally includes electronic filing as

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well as other media specifically permitted under applicable guidance.
C. Employee Benefits
1. Funding provisions for qualified defined benefit pension plans
Section 412 provides minimum funding standards for qualified defined benefit
and other pension plans. Section 412(c) provides for waivers of the minimum funding
requirements in the event of temporary substantial business hardship. In order for a
plan other than a multiemployer plan to receive a waiver, section 412(c)(5) provides that
an application for a waiver must be submitted no later than the 15th day of the 3rd
month beginning after the close of the plan year for which the waiver is sought.
Section 432(b)(3)(A) provides special rules for certain multiemployer defined
benefit plans. For a plan that is subject to those requirements, the plan actuary must
make certain certifications each year regarding the plan’s funded status. The deadline
for these certifications for a plan year is the 90th day of the plan year. Under section
432(b)(3)(D), in certain circumstances, the plan sponsor is required to provide notice
regarding the plan’s funded status to the participants and beneficiaries, the bargaining
parties, the Pension Benefit Guaranty Corporation, the Secretary of Labor and, if
applicable, the Secretary of the Treasury. Section 432(c)(1) requires, for the first plan
year that a multiemployer plan is in endangered status, that the plan sponsor adopt a
funding improvement plan providing one or more schedules of revised benefit
structures, revised contribution structures, or both, no later than 240 days following the
required date for the actuarial certification of endangered status and notify the

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bargaining parties of the schedules within 30 days after their adoption. Section
432(c)(6) requires the plan sponsor to update the funding improvement plan and
schedules annually and attach that update to the Form 5500 filed for the plan year.
Section 432(e)(1)(A) and (3)(B) impose similar adoption, notification, and update
requirements with respect to a rehabilitation plan for a multiemployer plan that is
certified to be in critical status.
Section 433 provides special funding rules for cooperative and small employer
charity pension (CSEC) plans as defined under section 414(y), including rules for
certification of funded status and the adoption of a funding restoration plan.
Sections 302, 305 and 306 of ERISA contain provisions that are parallel to
sections 412, 432 and 433 of the Code, respectively.
2. Form 5330, Return of Excise Taxes Related to Employee Benefit Plans
The Form 5330 is used to report and pay a variety of excise taxes with respect to
employee benefit arrangements and tax-exempt entities. See Table 1 of the
Instructions for Form 5330 for a list of filing deadlines for those excise taxes.
3. Certain Tax Exempt and Government Entities/Employee Plans programs
a. Initial remedial amendment period for section 403(b) plans
Section 21.02 of Rev. Proc. 2013-22, 2013-18 IRB 985, as modified by Rev.
Proc. 2014-28, 2014-16 IRB 944, and Rev. Proc. 2015-22, 2015-11 IRB 754, and
clarified by Rev. Proc. 2017-18, 2017-5 IRB 743, establishes a remedial amendment
period that permits an eligible employer to retroactively correct form defects in its written

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section 403(b) plan by timely adopting a section 403(b) pre-approved plan or by
otherwise timely amending its section 403(b) individually designed plan. Rev. Proc.
2017-18 provides that March 31, 2020, is the last day of this initial remedial amendment
period.
Rev. Proc. 2019-39, 2019-42 IRB 945, sets forth a system of recurring remedial
amendment periods for correcting form defects in section 403(b) individually designed
plans and section 403(b) pre-approved plans first occurring after the initial remedial
amendment period ends, and provides a limited extension of the initial remedial
amendment period for certain form defects that is based, in part, on the initial March 31,
2020, deadline. Rev. Proc. 2019-39 also provides deadlines for the adoption of plan
amendments for section 403(b) individually designed plans and section 403(b) pre-
approved plans with respect to a form defect first occurring after the end of the initial
remedial amendment period.
b. Pre-approved defined benefit plans
Rev. Proc. 2016-37, 2016-29 IRB 136, provides a regular six-year remedial
amendment cycle that applies for pre-approved plans. Section 15.03(1) of Rev. Proc.
2016-37 provides that the remedial amendment period for a disqualifying provision will
not end before the last day of a plan’s first applicable remedial amendment cycle in
which an application for an opinion or advisory letter that considers the disqualifying
provision may be submitted.

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Announcement 2018-05, 2018-13 IRB 461, provides that an adopting employer
who adopts, by April 30, 2020, a master and prototype (M&P) or volume submitter (VS)
defined benefit plan that was approved based on Notice 2012-76, 2012-52 IRB 775
(2012 Cumulative List), will be considered to have adopted the plan within the second
six-year remedial amendment cycle. Announcement 2018-05 also provides that an
adopting employer of an M&P or VS plan may apply for an individual determination
letter (if otherwise eligible) during the period beginning on May 1, 2018, and ending April
30, 2020. Announcement 2018-05 further provides that April 30, 2020, is the end of the
second six-year remedial amendment cycle for pre-approved defined benefit plans.
Rev. Proc. 2020-10, 2020-2 IRB 295, provides that the third six-year remedial
amendment cycle for pre-approved defined benefit plans begins on the following day,
and ends on January 31, 2025.
c. Deadlines for voluntary correction under EPCRS
Rev. Proc. 2019-19, 2019-19 IRB 1086, sets forth a system of correction
programs for sponsors of retirement plans that are intended to satisfy the requirements
of section 401(a), 403(a), 403(b), 408(k), or 408(p). The Employee Plans Compliance
Resolution System (EPCRS) permits employers sponsoring these plans to correct
certain failures and thereby continue to provide their employees with retirement benefits
on a tax-favored basis. The components of EPCRS are the Self-Correction Program
(SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement
Program (Audit CAP).

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Under VCP, a plan sponsor may, at any time before audit, pay a limited fee and
receive the IRS’s approval for correction of a plan failure that has been identified to the
IRS, in writing, by the plan sponsor. Once agreement has been reached with the plan
sponsor as to the appropriate corrective action to be undertaken, the IRS will send the
plan sponsor a compliance statement specifying the corrective action required.
Pursuant to section 10.06(9) of Rev. Proc. 2019-19, the plan sponsor must implement
the corrective action set forth in the compliance statement within 150 days of the date of
the compliance statement. In addition, if the corrective action specified in the
compliance statement includes the adoption of a corrective plan amendment, the
corrective amendment must be adopted no later than 150 days after the date of the
compliance statement (with a later deadline in the case of a governmental plan
described in section 414(d)).
d. Substitute mortality tables
Rev. Proc. 2017–55, 2017–43 IRB 373, provides guidance with respect to the
use of a substitute mortality table in accordance with section 430(h)(3)(C). Section 4 of
Rev. Proc. 2017-55 notes that, under section 430(h)(3)(C)(v)(I), a request for approval
to use substitute mortality tables generally must be submitted at least 7 months before
the first day of the first plan year for which the substitute mortality tables are to apply.
D. Exempt organizations
1. Form 990-N electronic notice requirement for certain small exempt
organizations

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Section 6033(i) requires organizations that are excused from filing an annual
information return (Form 990 series) by reason of normally having annual gross receipts
below a certain specified amount (currently $50,000) to furnish an annual electronic
notification. The annual electronic notification (Form 990-N, e-Postcard) is due by the
15th day of the fifth month after the close of the organization’s tax year.
2. Time for filing suit for declaratory judgment
Section 7428 provides that an organization may file, within a specified period, an
appropriate pleading for declaratory judgment with the United States Tax Court, the
United States Court of Federal Claims, or the district court of the United States for the
District of Columbia, involving the IRS’s determination, or failure to make a
determination, with respect to the organization’s initial or continuing qualification or
classification as an exempt organization described in section 501(c) or (d) and exempt
from tax under section 501(a), an organization described in section 170(c)(2), a private
foundation under section 509(a), a private operating foundation under section
4942(j)(3), or a cooperative described in section 521(b). Although Notice 2020-23
postponed the time to commence an action for declaratory judgment with the United
States Tax Court, it did not cover similar suits filed with the Court of Federal Claims or
the district court of the United States for the District of Columbia.
E. Forms 5498, -ESA, -SA

Form 5498, IRA Contribution Information, Form 5498-ESA, Coverdell ESA
Contribution Information, and Form 5498-SA, HSA, Archer MSA, or Medicare

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Advantage MSA Information, must be filed with the IRS and furnished to participants
and beneficiaries by the times specified in the instructions to these forms.
III. RELIEF GRANTED
This notice amplifies the definition of Affected Taxpayer as provided in Notice
2020-23 to include Affected Taxpayers as defined in section III.A of this notice. This
notice also amplifies the definition of Specified Time-Sensitive Actions as provided in
Notice 2020-23 to include the Time-Sensitive Actions described in section III.B of this
notice that are due to be performed on or after March 30, 2020, and before July 15,
2020. These amplified definitions, rather than the definitions in Notice 2020-23, apply for
purposes of the relief described in this section III.
Pursuant to this notice, the revised deadline for an Affected Taxpayer to perform
a Time-Sensitive Action described in section III.B of this notice is July 15, 2020, unless
a different revised deadline is specified under section III.B.2(e) or III.B.4 of this notice.
In the case of Time-Sensitive Actions with respect to provisions of the Code for which
there are parallel provisions in ERISA, the relief provided under this section III also
applies for purposes of those provisions under ERISA.
This notice also provides a temporary waiver of the requirement under
§ 31.3511-1(g)(2) that CPEOs file certain employment tax returns, and their
accompanying schedules, on magnetic media (including electronic filing). This
temporary waiver is extended to all CPEOs; individual requests for waiver do not need
to be submitted. The waiver applies only to Forms 941 filed for the second, third, and

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fourth quarter of 2020 and only to Forms 943 filed for calendar year 2020, and their
accompanying schedules. Accordingly, CPEOs are permitted, but not required, to file a
paper Form 941, and its accompanying schedules, in lieu of electronic submission for
the second, third, and fourth quarters of calendar year 2020. In addition, CPEOs are
permitted, but not required, to file a paper Form 943, and its accompanying schedules,
in lieu of electronic submission for calendar year 2020.
A. Affected Taxpayers
For purposes of the relief provided with respect to Time-Sensitive Actions
described in section III.B of this notice, Affected Taxpayers include:
1. With respect to employment taxes, employers who perform a Time-
Sensitive Action described in section III.B.1 of this notice.
2. With respect to employee benefit plans, the plan (including a section
403(b) plan, a governmental section 457(b) plan, a SEP plan described in
section 408(k), or a SIMPLE IRA plan described in section 408(p)), or any
sponsor, administrator, participant, beneficiary, disqualified person, or
other person with respect to such a plan who performs a Time-Sensitive
Action described in section III.B.2 of this notice.
3. With respect to exempt organizations, those persons performing a Time-
Sensitive Action described in section III.B.3 of this notice.
4. Filers of a Form 5498, Form 5498-SA, or 5498-ESA for whom filing the
form is a Time-Sensitive Action described in section III.B.4 of this notice.

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B. Time-Sensitive Actions
The Time-Sensitive Actions to which the relief under this section III applies are:
1. Correction of employment tax reporting errors using the interest-free
adjustment process under sections 6205 and 6413

Actions to correct underpayments or overpayments pursuant to sections
6205 and 6413, respectively.
2. Qualified retirement plans
a. Funding waiver
Application for a funding waiver under section 412(c) for a defined
benefit pension plan that is not a multiemployer plan.
b. Multiemployer plan funding
With respect to a multiemployer defined benefit pension plan, actions
due to be performed on or before the dates described in:
• Section 432(b)(3) for the certification of funded status and the
notice to interested parties of that certification.
• Sections 432(c)(1) and 432(e)(1) for the adoption of, and the
notification to the bargaining parties of the schedules under, a
funding improvement plan or rehabilitation plan.
• Sections 432(c)(6) and 432(e)(3) for the annual update of a funding
improvement plan and its contribution schedules, or rehabilitation
plan and its contribution schedules, and the filing of those updates
with the Form 5500 annual return.

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c. CSEC plans
With respect to a CSEC plan, actions to be performed on or before
the date described in:
• Section 433(c)(9) for making the contribution required to be made
for the plan year.
• Section 433(f)(3)(B) for making required quarterly installments.
• Section 433(j)(3) for the adoption of a funding restoration plan.
• Section 433(j)(4) for the certification of funded status.

d. Form 5330
Filing of Form 5330 and payment of the associated excise taxes. The
period beginning on March 30, 2020, and ending on July 15, 2020, will
be disregarded in the calculation of any interest or penalty for failure to
file the Form 5330 or to pay the excise tax postponed by this notice.
Interest and penalties with respect to such postponed filing and payment
obligations will begin to accrue on July 16, 2020.
e. Tax Exempt and Government Entities Division, Employee Plans
programs

• Extension of initial remedial amendment period for section 403(b)
plans. With respect to the remedial amendment period and plan
amendment rules for section 403(b) plans described in Rev. Proc.
2017-18 and Rev. Proc. 2019-39, actions that are otherwise

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required to be performed on or before March 31, 2020, with respect
to form defects or plan amendments. The deadline for those actions
is postponed to June 30, 2020 (and “June 30, 2020” should be
substituted for all references to “March 31, 2020” in Rev. Proc.
2017-18 and in Rev. Proc. 2019-39).
• Pre-approved defined benefit plans. With respect to pre-approved
defined benefit plans, the deadline for the following actions is
postponed until July 31, 2020:
o Adoption of a pre-approved defined benefit plan that was
approved based on the 2012 Cumulative List;
o Submission of a determination letter application under the
second six-year remedial amendment cycle; and
o Actions that are otherwise required to be performed with respect
to disqualifying provisions during the remedial amendment
period that would otherwise end on April 30, 2020.
• EPCRS. With respect to a compliance statement issued under
VCP, implementation of all corrective actions, including adoption of
corrective amendments, required by the compliance statement.
• Substitute mortality table. Request for approval of a substitute
mortality table in accordance with section 430(h)(3)(C).

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3. Exempt organizations
a. Form 990-N electronic notice requirement for certain small exempt
organizations

Electronic submissions of Form 990-N under section 6033(i).
b. Time for Commencing a Suit for Declaratory Judgment Pursuant to
Section 7428

Filings by organizations listed in section 7428(a)(1) of an appropriate
pleading for declaratory judgment with the United States Court of
Federal Claims or the district court of the United States for the District
of Columbia, within the period specified in section 7428(b)(3).
4. Form 5498 series

With respect to the Form 5498, IRA Contribution Information, Form 5498-
ESA, Coverdell ESA Contribution Information, and the Form 5498-SA, HSA,
Archer MSA, or Medicare Advantage MSA Information, the due date for filing
and furnishing the forms is postponed to August 31, 2020. The period
beginning on the original due date of those forms and ending on August 31,
2020, will be disregarded in the calculation of any penalty for failure to file
those forms. Penalties with respect to such a postponed filing will begin to
accrue on September 1, 2020.

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IV. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 2017-18, Rev. Proc. 2017-55, Announcement 2018-05, Rev. Proc.
2019-19, Rev. Proc. 2019-39, and Rev. Proc. 2020-10 are modified, and Notice 2020-
18, Notice 2020-20, and Notice 2020-23 are amplified.
V. DRAFTING INFORMATION
The principal author of this notice is Diane S. Bloom of the Office of Associate
Chief Counsel, Employee Plans, Exempt Organizations, and Employment Taxes, with
the participation of staff from other offices. For further information regarding the
guidance related to employment taxes under this notice, please contact Lynne A.
Camillo at (202) 317-4774 or Nina Roca at (202) 317-6798. For further information
regarding the guidance related to qualified retirement plans under this notice, please
contact Diane S. Bloom at (202) 317-6700. For further information regarding the
guidance related to exempt organizations under this notice, please contact Ingrid M.
Vatamanu at (202) 317-4541. These telephone calls are not toll-free.