Preparers divided over postponing filing deadline

Debate continues over delaying Tax Day because of the pandemic, and tax preparers are voicing equally different opinions.

“The IRS commissioner has already rejected an extension of the tax-filing deadline for reasons that most observers agree with, myself included,” said Chris Smith, CPA, managing partner of the East Hanover, N.J., office of Top 100 Firm Friedman.

Leaders of the House Ways and Means Committee and accounting groups, however, are calling for extending the tax deadline to give the IRS, taxpayers and tax professionals an extra three months. The American Institute of CPAs and the National Conference of CPA Pracitioners, among others, have asked the Treasury Department and the IRS to push back the tax filing and payment deadline to June 15, pointing to the challenges created by the pandemic and the backlog at the IRS.

A delay will hurt the profession, some responded.

“An extension would have only created more scheduling and workload complications for those of us preparing returns on behalf of clients, and increased demand for work during a sensitive time of year,” Smith added.

“We need to instill discipline back to the profession and continue the deadlines as they have been set up in the past,” said Dan Gibson, a tax partner in the Private Business Services Group of Top 100 firm EisnerAmper. “Everyone has got a year under their belt and should now have adapted to the environment in which we now work.”

Jeff Gentner, an Enrolled Agent in Williamsville, New York, said that his practice is on target to finish on April 15 so far. “I think people tend to procrastinate when the deadline is extended,” he said. “Many of my colleagues around the country found they we’re working really hard in July to get every return completed. That makes for a very long season.”

E. Martin Davidoff, CPA, Esq., and partner-in-charge of the national tax controversy practice at Top 100 Firm Prager Metis, believes the deadline should not be extended. “It is easy for them to get an extension of time to file,” he said. “Extending the time gives our clients another reason not to get their information into us timely, and [an extended season] puts a strain on our people.”

“When it was first announced that the e-filing would not open until late February, I thought it might be best to extend the season. I’ve since changed my opinion,” said Twila Midwood, an EA at Advanced Tax Centre in Rockledge, Florida. “I don’t think COVID-19 is really impacting tax preparation services like it did at the onset of the pandemic last year. I’d venture to say that most preparation offices have adapted to the necessary changes and have worked with clients in this new environment.”

But Brian Stoner, a CPA in Burbank, California, said, “My personal feeling is that since the IRS still hasn't processed 2019 mailed paper tax returns — they just finished opening their piled-up mail — and the fact that e-filing season wasn't actually started until February 12, about three weeks later than usual, both tax preparers and the service will have a lot of pressure taken off by extending the filing date to June or July 15.”

“Extensions to file can be filed as usual, but the IRS is penalizing preparers and taxpayers by not allowing the extra two to three months for the taxes to be paid without penalties and interest,” Stoner said.

Sophia Germer/Bloomberg

An especially challenging season

Most tax pros recently surveyed by the National Association of Tax Professionals found last season’s filing extension to July 15 helpful and want another this season. Respondents also cited the lack of guidance from the IRS on new tax provisions related to COVID-19 relief, taxpayers’ confusion about the tax impacts of COVID-19, and even the ongoing delay in processing 2019 returns as some of the biggest challenges of this special season.

On its blog, Taxbuzz recently posted a discussion on some of the biggest challenges for preparers this year. They included the distraction of client calls about Economic Impact Payments, balancing 2020 and 2019 returns to secure a $1,400 stimulus payment for clients, and overall client service.

“Considering that the IRS opened e-filing later than normal and the late passage of federal laws where states needed to conform or not, it needs to be extended,” said Chris Hardy, an EA and managing director at Georgia-based Paramount Tax and Accounting.

“Think about it,” he added. “The typical uneventful busy season is approximately 90 days, and now we have to deal with last-minute adjustments, guidance and state conformity issues … Taxpayers should not have to pay a late-filing penalty due to Congress’s inability to pass timely legislation.”

Cry ‘havoc’?

Tools already exist to permit extra time, some preparers pointed out.

Said Davidoff, “Anyone who’s unable to pay by April 15 should get a 60-day period without late payment penalties … by simply making a truthful assertion that they were unable to pay — a very simple system that requires no evaluation of why they’re unable to pay.”

“My office has not seen situations where clients can’t gather their documents due to COVID-related matters,” Midwood added. “The real issue is not about extending filing season but about payment of taxes. That should be addressed separately for those who have been financially impacted by the pandemic. An extension of the filing season may only wreak additional havoc on an IRS that’s already under resourced.”