The IRS backlog and companies saying they needed more time led some business groups and the National Treasury Employees Union, which represents the agency’s workers, to ask Treasury Secretary Steven Mnuchin for another delay.
Mnuchin declined to push back the due date again, but said taxpayers could request an extension to file until Oct. 15, an option that is available every year. Filers who seek an extension still have to pay by Wednesday or they will start incurring interest and penalties.
The decision to keep the July 15 date may ultimately help some taxpayers avoid racking up large tax bills that they’d be unable to pay later on, said Pete Isberg, vice president of government relations at payroll processor American Data Processing Inc.
“Tax deferrals can be a good way to get into trouble,” Isberg said. “They can be helpful in the short term, but in the long term it just kicks the can down the road and can make things more difficult.”
Uniquely Challenging
While this filing season has been uniquely challenging for the IRS, the agency has faced a string of difficulties in recent years. Last year, it was largely closed during the first weeks of the filing season because of a government shutdown stemming from funding squabbles in Congress. Two years ago, the IRS website faced technical glitches on deadline day, forcing the agency to give taxpayers another day to file.
One bright spot in this filing season is that most individual taxpayers, who are more likely to receive refunds than owe the IRS, have already submitted their paperwork, according to agency data. The IRS had received 142.4 million tax returns as of July 3, down about 2% from the same time period last year. The agency anticipates it will receive more than 150 million individual returns this year.
“I was struck by the fact that most taxpayers have their stuff together,” said Gordon Gray, director of fiscal policy at the Washington-based American Action Forum. “Folks had the freedom to delay, and most people filed despite that.”
And those who are owed refunds and haven’t received them yet could be getting a little something extra from the IRS. The agency said last month that it will pay 5% interest on refunds that haven’t yet been processed from April 15 to June 30 and 3% after that.
This article was provided by Bloomberg News.