The American Institute of Certified Public Accountants is pushing for a postponement of the filing and payment deadlines for the 2020 tax year, urging the U.S.Treasury Department and the Internal Revenue Service to act immediately to provide tax filing and payment relief for taxpayers and tax professionals affected by the ongoing pandemic.
In a letter dated March 4, the group asks that all 2020 federal income tax, information returns and payments—such as extension and estimated payments—due April 15 be moved to June 15.
Last year, the IRS extended the filing deadline for 2019 returns to July 15. The agency also delayed the 2020 due dates for first- and second-quarter estimated payments. And this year it pushed back the start of tax filing season to Feb. 12, about two weeks later than normal, because the IRS said it needed to update and test its systems following the late-December legislation that approved a second round of stimulus payments and other tax benefits. However, the April filing deadline did not change.
But AICPA asserts that in the current environment it is not possible for many taxpayers and their tax advisers to meet their filing and payment obligations by April 15.
“The effect of numerous legislative changes overloading tax busy season compels us to speak up now,” AICPA vice president of taxation Edward Karl said in a statement. “We understand that there are some challenges associated with extending the payment and filing deadlines. However, time is a critical factor. Taxpayers and tax professionals need this postponement, and they need to have certainty about the filing date now.”
In its request for an extension, the group argues that because of a delayed start of the 2020 filing season, many IRS forms are still not available for electronic filing. And it said the second round of Paycheck Protection Program (PPP) loans, which had a challenging rollout, continues to require a significant amount of assistance to small-business clients.
Other factors cited by the AICPA include changes to the Employee Retention Credit (ERC), which required possible amendment of 2020 payroll tax returns prior to filing 2020 income tax returns so that the gross income accurately reflects the ERC amount; a delayed processing by the IRS of 2019 returns that resulted in a rash of erroneous notices; and the coronavirus impact on IRS’s staffing, affecting its ability to respond to notices and taxpayers’ questions.
The AICPA further noted there remains confusion as to who is eligible to receive a stimulus payment, and whether it is taxable. The group also noted that continued stay-at-home orders make it difficult to access taxpayer data, particularly among certain populations such as the elderly.
This is the latest request AICPA has sent to the Treasury Department and the IRS. On Feb. 23, it asked that taxpayers be provided with more certainty and stability regarding tax filing and payment deadlines by March 1, and the extended date should be June 15.
And on Feb. 16, the group called for relief from underpayment penalties and late payment penalties for the 2020 tax year. Specifically, it recommended that taxpayers receive relief from underpayment penalties if they paid at least 70% of the tax due for the current year or paid 70% (90% if adjusted gross income exceeds $150,000) of the amount of tax shown on their U.S. income tax return for the prior year.
Also, it said taxpayers should receive relief from late payment penalties if they timely request an extension of time to file their income tax return and pay at least 70% of the taxes owed with the request.