The nation’s largest CPA association urged the IRS to decide in less than a week whether it will extend the 2021 filing season and payment deadline by two months.
“The rapid emergence of the Coronavirus pandemic generated never-before uncertainty,” the American Institute of CPAs said in a letter to the IRS and Treasury. “With approximately 28.1 million people infected and about 500,000 deaths due to the Coronavirus, there is an ever-growing uneasiness with the uncertainty surrounding the April 15 tax filing deadline.”
The AICPA asked the IRS to make up its mind by March 1 about extending the filing and penalties deadline, and if it does extend the deadline, to move it from April 15 to June 15.
The association’s February 23 letter to IRS Commissioner Charles Rettig and Mark Mazur, Treasury acting assistant secretary for tax policy, came the same day Rettig testified before a House Appropriations subcommittee that, while the agency has no plans to extend the filing season deadline, management is still considering it.
House Ways and Means Committee Democrats asked Rettig February 18 to extend the filing season, though with no specific date, and to announce the change as soon as possible.
The June 15 deadline would allow more taxpayers to be vaccinated against COVID-19 and to attend in-person tax meetings, the AICPA noted.
A June 15 filing deadline would also coincide with the second-quarter estimated federal tax payment deadline, and the payment could be included with the return, the association said.
A March 1 decision date would also give states more time to conform, and 46 states with a June 30 fiscal year-end could more easily adapt to a deadline before that date than to an extension to July 15, the AICPA said.
Penalty and Collection Relief
The AICPA also asked the IRS to provide underpayment and late payment penalty relief for the 2020 tax year.
Rettig appeared to quash tax professionals’ earlier calls for blanket penalty relief at an AICPA online conference November 17, 2020, when he declared, “It’s not going to happen.” The IRS would continue to assess penalty relief requests case by case, he said at the time.
However, the association called for the tax agency to lay off penalties if taxpayers paid at least 70 percent of their taxes due for 2020 or 70 percent (90 percent if their adjusted gross incomes top $150,000) of the tax owed on their income tax returns for the prior year.
The IRS should also relieve late payment penalties if taxpayers timely request an extension to file their income tax returns and pay at least 70 percent of the taxes owed, the association said.
The IRS should, at a minimum, halt automatic collection activities for 90 days after the April 15 deadline, the AICPA added.
The agency should also halt compliance actions “until it is prepared to devote the necessary resources for a proper and timely resolution of the matter,” the association said.
More E-Sigs, Please
The AICPA also asked the IRS to consider expanding the scope of its December 11, 2020, memorandum allowing the use of electronic signatures on a limited number of tax forms to include non-income tax returns and paper-filed returns.
“Manual signatures are burdensome and, in some cases, impossible to obtain” under continuing COVID-19 social distancing and other interpersonal restrictions, the association noted.
The IRS has accelerated electronic communications rollouts in response to the stresses of the pandemic on tax professionals and taxpayers, but practitioners want more, and sooner.