×

IRS should delay 2021 income tax filing deadline

Because of the coronavirus pandemic, last year’s tax-filing season became a nightmare, not only for many millions of Americans awaiting refunds but also for the Internal Revenue Service itself.

Most of the 2019 tax process remained sidetracked well into 2020 as COVID-19 continued to inflict its terrible, deadly impacts throughout the nation.

Even now, more than two full months into 2021, the federal tax agency reportedly still has not finished with its 2019 workload. Beyond dealing with the remaining unprocessed returns from that year, the IRS also reportedly is focusing on resolving a number of erroneously issued notices.

All considered, the words “good luck” seem apropos for the tasks and challenges from that year that lie ahead, coupled with the massive undertaking that the full load of returns from 2020 will entail.

Then there are the uncertainties posed by the fact that the coronavirus shows no signs of going away permanently anytime soon.

Meanwhile, the variants of the illness showing up — spreading — around the world at this time are something else that will need to be reckoned with, medically and in other aspects of life.

So, what to do regarding the 2020 tax “highway” Americans began traveling last month, now that Congress has approved President Joe Biden’s economic stimulus package?

That package has added a new element that will impact not only millions of returns yet to be filed, but also millions already filed and subsequently processed by the IRS.

This year could end up being dubbed “Year of the Amended Tax Return.”

What the new stimulus bill has done is exempt the first $10,200 of 2020 unemployment benefits from income for households that made under $150,000 last year.

In a March 9 article, the Wall Street Journal said that stimulus package component “could save households about $25 billion, but implementing the change would be a challenge for the Internal Revenue Service, and it could lead to disruptions.”

The Journal reported that as of late February, the IRS had received more than 45 million tax returns, some of which will now likely have to be amended.

“The IRS will need to reprogram its computers to include the new, retroactive change as people file returns to take advantage of it,” the Journal continued. “That is happening during an already messy tax season complicated by the coronavirus pandemic, remote work and a pile of other tax-law changes.”

Former IRS Commissioner John Koskinen has estimated that the tax agency likely will have to stop accepting returns for at least a few days so that the reprogram and testing can be accomplished properly — not good news to some hard-pressed taxpayers ready to put their returns into the processing pipeline at this time, but not bad news to people who will benefit from the unemployment-related money exemption.

Beyond that, there is the important issue of the April 15 tax-filing deadline, which is only a month away.

Last year, as the COVID-19 infection and death rates were ramping up at an alarming pace, the IRS pushed back the annual filing deadline three months, to July 15.

With the pandemic still sickening and killing people and otherwise disrupting lives, and with the pandemic stimulus bill’s passage having come so late, this year’s deadline also should be reset to a later date.

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

COMMENTS

[vivafbcomment]

Starting at $3.92/week.

Subscribe Today