Accountant groups call for extending filing season amid coronavirus threat
The National Society of Accountants sent a letter Friday to Internal Revenue Service Commissioner Charles Rettig, asking for the IRS to extend tax-filing season because of the threat from the coronavirus, while the National Conference of CPA Practitioners asked the IRS and the Treasury to waive penalties and interest charges for taxpayers.
The American Institute of CPAs also requested earlier this week that the April 15 tax deadline be pushed back, along with other forms of tax relief (see our story). Treasury Secretary Steven Mnuchin indicated an openness to doing that during a congressional hearing Wednesday, but so far President Trump has only called for deferring interest and penalties for “certain individuals and businesses negatively impacted” by coronavirus.
In its letter, the National Society of Accountants pointed to supply chain interruptions, travel restrictions and other challenges related to the spread of COVID-19, saying they could make it difficult or impossible for members’ clients to organize their tax information or make payments on time. The IRS has an automatic extension in place, but it is not a grace period and does not extend the date on which tax obligations must be paid, the NSA noted. The NSA asked Rettig to adjust the filing season due date to May 31, 2020, for all individual and business tax returns.
“Our members are extremely concerned that some of their clients, especially small businesses, will have difficulty meeting the April 15 tax deadline,” said NSA CEO John Rice in his letter to Rettig. “These clients are reporting day-to-day business disruptions including travel restrictions, supply chain interruptions, and diminished customer traffic resulting in reduced revenue and limited access to tax documentation. Our members are indicating that these developments present significant challenges for clients in organizing tax records and making final and/or estimated tax payments.”
NCCPAP asked the IRS and the Treasury Department not to impose penalties or interest charges for tax years 2019 and 2020 on individual and business tax returns due after March 15, 2020. “With the uncertainty of the April 15, 2020, due date for 2019 individual income tax returns being extended, there is the possibility that individual taxpayers may not have paid a sufficient amount to cover their income tax liability for 2019,” the organization wrote. “With the anticipated extension of the 2019 return due date, this will also impact potential payments against their 2020 liability. Both years will be affected by the delay for 2019 returns, and both years should be granted relief.”
NCCPAP also asked that the due date for 2019 IRA contributions be extended to the same new due date as the income tax returns. In addition, the group requested relief from penalties not only for income tax returns, but also for all other elections and filings, such as payroll tax reports. “If the business owner is affected by the pandemic and not allowed to go to the office, the filing of a payroll tax report and making the necessary payment might be delayed past the normal due date,” said NCCPAP.
The group also asked for payment relief for those taxpayers who have already filed their returns and requested their payment be made via direct debit. Those payments should be delayed through the extended filing date.
"It is our concern that taxpayers not be penalized due to their own health situation, or to other factors beyond their control due to the pandemic," said NCCPAP president Neil Fishman, in a joint statement with Stephen Mankowski and Sanford Zinman, co-chairs of the NCCPAP Tax Policy Committee. "We are concerned about our clients as well as our staff. While there are many ways for clients to send their information to us in a secure fashion, not all of our clients may have the ability to get us their information, especially if quarantined.”
The AICPA reiterated its concerns late Friday about the lack of details on what forms of tax relief would be provided. “The AICPA appreciates the efforts being made by the Treasury Department and IRS to provide relief to the taxpaying public," said Edward Karl, vice president of tax policy and advocacy at the AICPA, in a statement. "However, in light of the uncertainty and challenges caused by the spread of the coronavirus pandemic, we are disappointed that the Treasury Department and IRS have yet to make an announcement on how relief would help millions of individuals and businesses and the CPAs who advise them.”
On the state level, the New Jersey Society of CPAs also called for the New Jersey Department of Treasury and Division of Taxation to provide relief to all New Jersey taxpayers in light of the coronavirus pandemic. “We are hearing from our members that they and their clients are experiencing great uncertainty about this year’s tax filing season. Our recommendations will help give taxpayers, large and small, much needed relief in the midst of this fast-moving emergency situation,” said NJCPA CEO Ralph Albert Thomas in a statement. “We continue to closely monitor the coronavirus pandemic and thank Treasury and the division for their commitment to the welfare of all taxpayers."
While New Jersey has not yet announced its tax relief plans, a number of other states have. The AICPA posted a list of them here.