The tax season every year is always full of ups and downs regarding financial statement release compliance and tax return preparation. Most tax seasons have their own unique character and differ in one way or another. Common changes that accountants face are changes in tax laws, accounting regulations, software changes, managing employee workload, and exceeding client expectations. This past year has been a year for the ages due to the Covid pandemic which has hit businesses and individuals very hard but has also created so many changes in tax legislation that it has created a heavy burden on preparers taxes in this country. To date, we have passed three major stimulus bills and other pieces of legislation in the past 12 months, which have created new tax credits, rules and regulations.
This year, tax preparers faced a lack of guidance in guiding their clients with Paycheck Protection Program (PPP) loan cancellation, second-round PPP loan application, credit card loans. Employee Retention (ERC), Stimulus Money and Unemployment Compensation partially tax-free, declares who are not federally compliant (or have not yet decided), unable to call the IRS and join an agent, and now the extension of the April 15 filing date for individual returns to May 17. of that the struggle of remote working, social distancing in the office, wearing masks, videoconferencing, managing personal and family life, and the health of friends, and oh yeah, trying to keep calm and sane through it all.
As of March, the IRS had yet to process approximately 6.7 million 2020 returns that have been filed since mid-February. He had processed nearly 49 million. It also has a number of unprocessed tax returns from 2019.
In addition to processing tax returns, the IRS is also sending out a third round of stimulus payments of around $ 150 million. As of Wednesday, around $ 90 million had been sent.
The American Institute of Certified Public Accountants (AICPA) has suggested and issued a request to the IRS to move the filing date for all returns to June 15. With all of the challenges listed here, the squeezing of tax season this year and last, the IRS problems and the constant change in legislation and guidelines, it makes sense for the US taxpayer and the tax system. voluntary tax compliance to move the filing date.
The IRS moved the April 15 date for personal income tax returns to May 17, but still left estimated tax payments for the first quarter, trust returns and tax payments, as well as corporate income tax returns (Form 1120) and payments still due on April 15. AICPA President and CEO Barry Melancon, CPA, CGMA said: âWhile we appreciate the recognition by the IRS that an extension of the filing deadline is indeed necessary, the announcement is way too much. selective as to who receives relief. ” Failure to align the filing date on all tax returns and payments only creates more confusion, complexity, and more stress for the U.S. taxpayer.
What do we want the IRS to do right now?
There are so many issues and complexities in everything that has happened, and no one wants to lay the blame anywhere. However, the American taxpayer and his tax preparers deserve the best opportunity to deal with the situation we all find ourselves in today. Some of the main changes on the spring wishlist:
- Extend all tax returns and payments from April 15 to June 15
- Take control of the phone system so taxpayers and their lawyers can discuss important matters with the IRS
- Design a plan and goal to deal with the backlog of returns and notices
- Respond to taxpayers in a timely manner
- Provide clear and timely guidance on all new tax laws so that voluntary tax compliance can be carried out effectively
The IRS’s mission is to provide U.S. taxpayers with superior service by helping them understand and fulfill their tax responsibilities and uphold the law with integrity and fairness for all.
With everything that has happened to taxpayers and businesses over the past year and the constant struggle to get things done, the above list would only illustrate the “fairness” part for all American taxpayers. IRS Commissioner Charles Rettig and his team can help bring relief this spring and the predicament we find ourselves in again. I know tax preparers could really use some clear advice and help navigating the tax filing system that is in front of them right now.
This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.
Mark Gallegos, CPA, MST, is a tax associate on the Porte Brown Accounting and Consulting Services team in the Elgin, Illinois office. He has over 20 years of experience. Since the start of the pandemic, Gallegos has been steeped in the intricacies of Covid-related stimulus programs, such as the Paycheck Protection Program (PPP) and the CARES Act. Gallegos co-hosts a recurring webinar series on the subject and speaks regularly on stimulus programs and other tax topics.
Bloomberg Tax Insights articles are written by seasoned practitioners, academics, and policy experts who discuss current tax developments and issues. To contribute, please contact us at [email protected].