Returns affected by e-filing outage will be timely if filed by Sept. 17

The IRS announced on Thursday that, for tax returns with a Sept. 15 due date that were affected by an e-filing software outage, the Service will treat a return and any elections that were filed with that return as timely filed if the taxpayer successfully e-filed the return and any elections by Sept. 17, 2020.

Due to technical problems with CCH’s e-filing system, some users were unable to get their returns into the e-file queue for much of the day on Sept. 15. The problem was fixed by early in the day on Sept. 16.

The Sept. 15 deadline applies to a number of federal tax returns, including Form 1120-S, U.S. Income Tax Return for an S Corporation, for calendar-year S corporations that requested a six-month extension, and Form 1065, U.S. Return of Partnership Income, for partnerships that requested a six-month extension.

In a Sept. 24 memorandum to IRS Services and Enforcement employees, Sunita Lough, IRS deputy commissioner for Services and Enforcement, acknowledged the e-filing software outage and announced that the IRS would treat as timely filed “a return and any elections that were filed with that return (for example, a Form 3115, Application for Change in Accounting Method) that were impacted by the September 15, 2020, external tax software outage if the taxpayer successfully e-filed the return and any elections that were filed with that return by September 17, 2020.”

The memorandum also notes that the IRS recently updated its procedures on the application of Sec. 7502, which contains the timely mailing as timely filing rule, to e-filed returns. Under Internal Revenue Manual Section 20.1.2.2.1.2, the IRS will consider an e-filed return as timely filed if the return (1) was transmitted via an authorized electronic return transmitter, (2) with a timely electronic postmark, and (3) was received by the IRS in processable form.

— Alistair M. Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is the JofA’s editor in chief, tax.