The IRS already delayed the federal April 15 tax-filing deadline by one month, but some accounting groups say that Americans still reeling from the coronavirus pandemic need more time to submit their returns.
The National Conference of CPA Practitioners urged the IRS in an open letter to extend the due date for all taxpayers until June 15, arguing the current guidance issued by the agency only benefits some taxpayers and "fails to recognize the real-world stresses of the past year that have been imposed on taxpayers, small businesses and tax practitioners."
"At this time, in the strongest possible terms, we request that they reconsider this recommendation — not just for the personal income tax returns, but for ALL returns and payments that would be due April 15," the group, which had previously urged the IRS to extend the deadline until June 15, 2021, wrote.
That's because under the latest policy change, millions of Americans still need to file their returns by April 15.
The automatic extension applies only to individual returns and payments for 2020, but does not include 2021 estimated-tax payments, which are used to pay levies in quarterly installments on income that is not subject to withholding, such as earnings from self-employment, alimony, dividends and capital gains.
The exclusion mostly affects freelancers, gig workers and self-employed individuals, as well as those with small businesses including sole proprietors, partners and S-corporation shareholders. More than 9.5 million returns included estimated tax payments during the 2018 tax year, according to the American Institute of Certified Public Accountants, an industry group.
“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,” Barry Melancon, AICPA CEO and president, said in a statement. “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.”
By not including estimated tax payments, the IRS essentially nullifies the postponement benefit for millions of Americans because calculating estimated tax payments required individuals to complete other tax work, the National Conference of CPA Practitioners argued, noting that many small business owners are lower- and middle-income Americans.
"Many tax return preparers are being contacted by their clients about the new May 17 due date, only to be informed that there are still certain forms that have to be submitted by April 15," they wrote. "This does not remove the burden from tax practitioners, it only enhances it."