The American Institute of CPAs is asking the Internal Revenue Service to further extend the deadline for filing and paying income taxes. The deadline for filing and payment of tax due is July 15, and the IRS says the agency won’t push back the deadline further.
Accounting Today magazine reports the AICPA makes its case in a letter to the IRS, saying the the COVID-19 pandemic continues to spread and record numbers of cases have been reported across the U.S.
The AICPA sets forth three major areas where the institute believes further relief should be issued:
Penalty Relief
Just like on a regular April 15 tax deadline, taxpayers who fail to file a return or pay the tax due by the July 15 deadline face a penalty. Accounting Today reports the AICPA recommends the IRS waive penalties automatically for the 2019 tax year all the way through the extended filing period for all taxpayers. The institute goes further, asking the IRS to take another look at the impact of the coronavirus during 2021 and consider offering similar penalty relief for the 2020 tax year as well.
Delay in IRS Collections
The AICPA has recommended the IRS stop its automatic collections of liens and levies for at least an additional 90 days after the July 15 deadline. The institute suggests reassessing restarting any collection activities at that time.
Normally, taxpayers receive a series of automated notices if they don’t pay their taxes in full at the time they’re due. The notices demand payment while reminding them of the amount owed and any penalties and interest accrued. The notices are a precursor of the automatic collection process, which continues until the tax debt is paid, or the case is moved to a revenue officer, or the IRS is no longer able to collect the tax legally.
Installment Agreements
At present, taxpayers who can’t pay their full tax bill in one payment can enter into an installment agreement with the IRS. AICPA suggests the IRS create an expedited installment agreement approval process, based on realistic payment arrangements for taxpayers who’ve been affected by the pandemic.
Accounting Today reports the AICPA recognizes the “hardship and uncertainty for taxpayers, and their advisers, and for the IRS,” created by the coronavirus. The institute’s suggestions, AICPA says, simply ask the IRS to do their part in a slowly opening environment.
For its part, the IRS maintains that the July 15 deadline will stay as-is. The agency maintains that its People First Initiative “endeavored to provide unprecedented relief to help those who owed federal taxes and allow them extra time.” But the bottom line remains: taxpayers who didn’t make previously owed tax payments between March 25 and July 15 because they were given extra time to do so, now need to pay up or face penalties or possibly default on their payment agreements.
Our thanks to Accounting Today and to AT Editor Michael Cohn.
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