House Ways and Means Committee Chairman Richard Neal (D-Mass.) on Monday reiterated his panel’s call for the IRS to extend the 2020 tax filing season deadline as the pandemic continues to hamper submissions and their review.
The current tax season is already behind last year’s schedule. As of the end of February, the number of returns filed were down by nearly 25% from this time last year, and the number of returns processed by the IRS were down by 31%. Further, only 27% of telephone calls to the IRS are being answered, indicating that approximately 3 out of every 4 taxpayers trying to reach the IRS are unable to get help.
This year’s filing season will likely become more complicated. Congress later this week is expected pass legislation that excludes the first $10,200 of the unemployment benefits from 2020 taxable income for people earning less than $150,000. President Joe Biden is expected to sign this legislation into law before March 14, 2021. Once it becomes law, the retroactive change to the tax code will create an additional responsibility for the IRS to process amended returns. The change in the tax law could affect up to 40 million taxpayers.
Neal’s call to postpone the tax season deadline follows a similar request from House Ways and Means Oversight Subcommittee Chairman Bill Pascrell (D-NJ). In early February, Pascrell and other members on the tax-writing committee penned a letter to IRS Commissioner Charles Rettig asking him to extend this year’s tax filing deadline. The letter did not prescribe a specific date to extend the deadline. However, it did state that last year’s deadline was extended to July 15, 2020. Chairman Neal, in his letter today, referenced the same deadline.
The AICPA has also called for delaying the filing deadline. In its letter last week, the organization urged the IRS and Treasury Department to delay the April 15, 2021 filing deadline for all 2020 Federal income tax returns, information returns, and payments (e.g., extension and estimated payments) to June 15, 2021.
Treasury and IRS officials have so far resisted calls from Congress and accounting organizations to extend these deadlines.
IRS Commissioner Charles Rettig told the House Appropriation’s Financial Services Subcommittee on February 23, 2021, that the agency is not planning to extend the tax season deadline.
However, the agency has extended tax deadlines for residents in Texas and Oklahoma who were ravaged by the winter storms in early February. These residents have until June 15, 2021, to file and pay any amounts owed on their 2020 income taxes. The IRS also pushed back the March 15 business-tax-return filing deadline for residents in these states.
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