Will the IRS Postpone the Tax Deadline? Politicians and Tax Preparers Demand an Extension
UPDATE: The IRS announced Wednesday that the federal filing deadline has been moved to May 17.
"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," IRS Commissioner Chuck Rettig said in a news release.
With tax season in full swing and a new round of stimulus checks on deck, a growing chorus of legislators and industry leaders is pushing the IRS to postpone Tax Day for the second year in a row.
The federal income tax filing deadline is set, as it more or less has been since 1955, for April 15. That's when taxes are due. The issue is that in 2020, the IRS moved the date to July 15 due to the coronavirus outbreak. Now, people want the 2021 deadline to be extended, too.
Rep. Richard Neal, the chairman of the House Ways and Committee, teamed up with Rep. Bill Pascrell on Monday to demand the IRS delay Tax Day.
"We stand in the midst of the most important tax filing season in recent memory, and taxpayers cannot get the help they need from the IRS," the Democrats said in a statement. "Facing enormous strain and anxiety, taxpayers need flexibility now."
They went on to say that although a lot of time has passed since the pandemic began stateside, taxpayers "continue to face the same health and economic challenges that necessitated an extension" last year. The situation is only going to get more complicated now that the American Rescue Plan has been signed into law. Not only does it change the rules around unemployment benefits on people's 2020 taxes, but it also approves a third round of stimulus checks — which the IRS is responsible for distributing.
Mark W. Everson, who served as IRS commissioner from 2003 to 2007, says the IRS has done a great job sending out millions of stimulus payments so far. But the agency's main duty is to handle taxes.
Moving the deadline again — while IRS employees are still dealing with a backlog of paper returns from 2020 — could complicate matters and overwhelm the agency. As it stands, the IRS doesn't even have enough customer service reps to answer all the incoming calls it gets.
"The service wants to respect the normal deadline and keep its work in proper sequencing," Everson, now the vice chairman of alliantgroup, says.
Then again, consumers can't be overlooked, either.
The Ways and Means statement is notable because its Oversight Subcommittee, of which Pascrell is chairman, oversees the IRS. It also follows a similar call from the American Institute of CPAs, which sent a letter to the IRS last week requesting a postponement. AICPA said "it is simply not possible for many taxpayers and their tax advisers" to meet their obligations by April 15.
AICPA went so far as to suggest a specific date: June 15. (Though the tax filing deadline was moved to July 15 in 2020, AICPA said it would pose problems for states this year.)
Everson says the messages coming from Congress and AICPA "are quite clear."
"It's totally appropriate for the IRS to be looking at this question from the point of view of tax administration and efficiencies, but it also needs to balance that with the fairness argument the chairman of Ways and Means is making," he adds.
Will the IRS tax deadline be extended?
The IRS did not return Money's request for comment. But current IRS Commissioner Chuck Rettig said in February there were no plans to extend the deadline, adding that it "it creates a lot of confusion for taxpayers" and "backs up" the IRS.
Bill Smith, a managing director for CBIZ MHM's National Tax Office, points to Rettig's remarks as evidence the date won't be moved. He also says this year's filing season doesn't pose the same problems as last year's did.
"There's a lot going on, but don't expect them to put off the April 15 filing deadline," Smith adds.
Regardless, if you need more time to do your taxes, you can always request an extension. This typically delays your filing deadline to Oct. 15. But remember: If you owe the government money, you still have to pay on time.
This story has been updated to reflect that President Joe Biden signed the American Rescue Plan into law.
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Answers to All Your 2021 Tax Questions, From Stimulus Checks to New Deductions