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Pressure Builds on IRS to Extend Quarterly Payment Deadline

Posted on Apr. 2, 2021

Sixty members of Congress have joined the growing chorus of calls for the IRS to extend the April 15 deadline for taxpayers to make their quarterly estimated tax payments.

“As individuals and small businesses continue to deal with the unprecedented impacts of the COVID-19 pandemic, we believe aligning the estimated payments deadline with the regular tax filing deadline will streamline tax filings and help ensure accurate tax compliance,” the bipartisan group of representatives said in a March 31 letter to IRS Commissioner Charles Rettig.

Contrary to Rettig’s claim at a March 18 House subcommittee hearing that an extension of the deadline would provide liquidity for rich investors to arbitrage, “we have heard from numerous struggling small businesses in our Congressional Districts that do not follow this practice and will not be able to file on time,” the group wrote.

The organizer of the letter, House Ways and Means Committee member Lloyd Smucker, R-Pa., was among the first to call out the commissioner at the hearing for extending to May 17 the filing deadline for 2020 individual income tax returns while refusing to offer the same extension for those making quarterly estimated payments.

“We find it unacceptable that the only option for these businesses is to pay a penalty in interest,” the letter says. “To avoid this inevitable scenario, we urge you to utilize your emergency authority to extend the federal tax filing deadline for first quarter estimated tax payments to May 17, 2021.”

Others who signed the letter include Ways and Means members Kevin Hern, R-Okla.; Darin LaHood, R-Ill.; John B. Larson, D-Conn.; Devin Nunes, R-Calif.; Tom Rice, R-S.C.; Thomas R. Suozzi, D-N.Y.; and Jackie Walorski, R-Ind.

‘More Complications’

Congress and the tax industry began agitating to extend the April 15 quarterly payment deadline almost as soon as word came that the IRS had decided to extend the individual filing and payments deadline.

The National Society of Accountants argued in a March 24 letter to Rettig and acting Treasury Assistant Secretary for Tax Policy Mark Mazur that extending the one deadline while leaving the other unchanged “ultimately creates more complications than relief.”

That’s because, as the lawmakers’ March 31 letter explains, “many small and medium sized businesses pay their quarterly estimated taxes based on their returns from the previous year.” If those businesses don’t file their 2020 returns until May 17, they won’t know what their estimated payment liability will be when it comes due April 15, the letter says.

In an April 1 release, Edward Karl of the American Institute of CPAs said, “The consequences of the IRS’ decision to exclude estimated payments will have a detrimental impact on millions of taxpayers who file quarterly estimated taxes, many of whom have already suffered tremendously during this pandemic.”

However, the IRS reiterated as recently as March 29 that it won’t extend the quarterly payment deadline.

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