In a recent letter to Treasury and the IRS, the AICPA called for greater certainty for taxpayers and tax practitioners and for underpayment and late-payment penalty relief, both of which will provide greater assistance to those affected by the COVID-19 pandemic.
In the letter, sent on Tuesday from Christopher Hesse, CPA, chair of the AICPA Tax Executive Committee, the AICPA urged Treasury and the IRS to announce any pending tax filing and payment deadline postponements by March 1. The AICPA also requested underpayment and late-payment penalty relief, a delay in collection activities, and an expansion of the temporary e-signature relief. The letter noted that many taxpayers and tax professionals continue to struggle to calculate and make tax payments and prepare and file tax returns.
The IRS has said that taxpayers and tax professionals should assume that the April 15 deadline will not change, but it has also been reported that the IRS will not commit to keeping an April 15 filing deadline if Congress approves another round of economic impact payments.
Specific AICPA recommendations include:
- If Treasury and the IRS determine they cannot hold to the April 15 deadline, that decision should be announced by March 1 and the postponed date should be June 15.
- Taxpayers should receive relief from underpayment penalties if they paid at least 70% of the tax due for the current year or paid 70% (90% if adjusted gross income (AGI) exceeds $150,000) of the amount of tax shown on their U.S. income tax return for the prior year.
- Taxpayers should also receive relief from late-payment penalties if they timely request an extension of time to file their income tax return and pay at least 70% of the taxes owed with the request.
- The IRS should halt compliance actions until it is prepared to devote the necessary resources for a proper and timely resolution of the matter.
- The IRS should expand the existing temporary e-signature relief currently being provided to the millions of taxpayers affected by and working through the challenges created by the pandemic.
— Alistair M. Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is the JofA’s editor-in-chief, tax.