A group of House Democrats is calling on the Internal Revenue Service to extend the tax-filing deadline by three months, warning that millions of taxpayers are still reeling financially from the coronavirus pandemic.
In a letter to IRS Commissioner Chuck Rettig, eight Democrats on the House Ways and Means Committee asked the agency to consider delaying the filing deadline until July 15 "without penalties or interest" in order to provide "important and necessary relief to taxpayers and practitioners."
"Due to the ongoing pandemic, many Americans continue to face the same challenges that necessitated extending the filing season last year," the lawmakers, led by Rep. Bill Pascrell, D-N.J., wrote.
The IRS extended the deadline for filing and paying taxes last year from April 15, the customary date, to July 15, because of the pandemic, part of a broader relief effort intended to let individuals and businesses hold onto their cash for longer.
An agency official said last week there are no plans to extend the deadline beyond April 15, even though the IRS delayed the start date for accepting returns to Feb. 12, when it usually starts doing so in late January. Taxpayers can request a six-month extension to file their returns, although any money owed needs to be paid to avoid a penalty.
The Democrats argued that conditions have not changed drastically since last year, noting that health and safety concerns about COVID-19 continue to "keep taxpayer assistance sites closed and taxpayers homebound."
They also said the condensed filing season gives taxpayers just two months to file their returns -- even as the IRS deals with a backlog of paper returns.
"We are troubled that this reduced timeline will exacerbate difficulties for many taxpayers who may be unprepared for the amount due with their return and will have no savings to turn to and less time to consider their options," they said, adding: "The IRS is still processing millions of returns from last year and has had less time to adjust to the training and safety needs of newly-hired or recalled employees."
The IRS has urged Americans to file their taxes electronically this year as the agency tries to sort through nearly 7 million unprocessed paper returns from last year. Last year, the agency received about 16 million paper returns last year; as of Dec. 25, the agency said it still had about 6.9 million individuals returns in the "processing pipeline" — or about 40%.
The delay means that people who claim Earned Income Tax Credit or Additional Child Tax Credit won't receive their refunds until the beginning of March, so long as they file electronically with direct deposits and there are no issues with their tax returns, the IRS said.
The agency said it expects nine out of 10 taxpayers to receive their refund within 21 days of filing electronically.