Many Taxpayers Won't Benefit From Delayed Tax Season

Following weeks of calls from the American Institute of CPAs (AICPA), Members of Congress and other groups to extend the April 15 filing and payment deadline, the Internal Revenue Service (IRS) announced today that it would extend the filing and payment deadline for some – but not all – taxpayers for the 2021 tax season to May 17.

“While we appreciate the IRS’ recognition that a filing deadline postponement is indeed necessary, the announcement is far too selective in who is receiving relief,” said AICPA President and CEO Barry Melancon, CPA, CGMA. “In fact, the taxpayers who are most likely to benefit from this additional time are taxpayers who are able to meet the original filing deadline.”

According to an IRS press release, the relief does not include estimated tax payments that are due on April 15. This IRS extension does not extend to the millions of small business owners and individuals who pay estimated taxes and the following:

Trust income tax payments and return filings on Form 1041
Corporate income tax payments and return filings on various Forms 1120

“Americans, individuals and small businesses have been impacted immeasurably. The fact is virtually all aspects of the federal government and state and local governments have also been impacted. A fair assessment might conclude, for a variety of reasons, that the IRS has been affected more than other federal agencies. I believe taxpayers and practitioners understand this,” Melancon continued. “It is commendable that the IRS wants to demonstrate a return to normalcy. However, the IRS, through no fault of their employees, is seeing significant backlogs, inundated phone lines, unopened mail by the millions and systems sending out unwarranted notices. Extending all tax returns due to June 15 exhibits an understanding of the IRS’ impact on the American public.”

In letters to the Department of the Treasury and the IRS, AICPA has emphasized that the benefits of extending the payment and filing deadline to June 15 would ease the impact of the pandemic on taxpayers – especially small businesses – and tax practitioners and help many states maintain revenue levels within their current fiscal years.

Failure to include estimated payments nullifies any benefit of a postponement since the tax return work has to be done to calculate estimated payments. More than 9.5 million individual returns filed in for the 2018 tax year included estimated payments.

“This selective decision by the IRS unfortunately creates more bureaucracy and confusion and is out of sync with real world stresses that taxpayers, tax practitioners and small businesses are dealing with,” said Melancon.