The extra weeks until July 15 fill up for preparers
Pushing Tax Day to July was hailed as a great time relief for taxpayers slammed by the pandemic. Has it worked out that way for preparers? Yes and no — and maybe, depending on what clients need in this new time.
“Not at all,” said Burbank, California, CPA Brian Stoner. “I’ve been answering questions and doing stimulus calculations at least two or three hours a day, although it is now slowing down a little. So I’ve had no extra time — plus I had to move my office to home, which took a few days.”
“If extra time means no overtime, there is some extra time,” said Mary Kay Foss, a CPA in Walnut Creek, California. “Clients stopped sending in tax information when the July 15 date was announced. Gradually all the returns with complete data are being prepared. Extra time means more family meals than in a typical busy season, but shelter-in-place prevents trips to restaurants or gatherings with friends.”
Barbara Taibi, a partner in the EisnerAmper personal wealth advisors group in Iselin, New Jersey, reports that her team has been working long hours to complete as much as possible as soon as possible.
“None of us wants to be working weekends in July when we can, hopefully, finally be outside,” she said. “We’re moving returns along and emailing to clients with the information that we can file at any time … We’re trying to avoid an additional bottleneck in late June/July.”
The relief started slowly with merely the federal payment deadline for income taxes — but swelled after groups like the American Institute of CPAs, the National Society of Accountants and the National Conference of CPA Practitioners pointed out that taxpayers and their accountants are dealing functionally with the pandemic. Then came relief from payment, filing and penalties for a variety of taxes at both the federal and states’ levels.
Then came the impact of tax authorities’ own slowdowns as phone lines closed, websites lagged, and workers had to begin logging on from their living rooms. Then came the stimulus packages.
“If we had had to go to a work-from-home environment and been required to keep the April 15 deadline, we would’ve been in trouble,” Taibi said. “As hard as we try, things are just taking longer to complete with our groups separated from each other. We have professionals trying to work, home school, and care for parents all at the same time. These additional three months are needed and appreciated.”
Deferral of the filing deadlines, statutes of limitations (i.e., tax court matters, appeals, claims for credits or refunds) and deadlines for many important tax provisions (such as for net operating loss carrybacks) “have given us extra time to address compliance filings and such,” said Robbin Caruso, a Cranbury, New Jersey-based partner in the tax controversy practice at Prager Metis.
But the CARES Act, she added, created many relief provisions requiring special attention to some clients “while also helping them to manage their personal and business needs during this crisis,” she said.
‘Early’ season rush
Government response to the coronavirus pandemic appeared generous but was bewildering for clients: more days to fund IRAs; looser rules for net operating losses and other business losses; the employee retention credit; and what some touted as seemingly free loans in the form of PPPs.
That all muddied the waters when it came to mundane seasonal tasks, such as extensions.
“Since I do not trust the IRS system to ‘remember’ that 2019 returns were automatically extended to July 15, I e-filed real 4868 extensions on all my unfiled clients on April 15,” said Bill Nemeth, president and education chair of the Georgia Association of Enrolled Agents. “I have proof that an extension was filed and it appears in their account transcript, giving them until Oct. 15 to timely file.”
Nemeth reports 50 percent more clients on extension this year than in an ordinary year. “They’ll all come in early July to get their returns done,” he said. “I can pace myself since I have another three months to timely file their returns.”