March 8, 2021—
Dear Secretary Yellen, Acting Assistant Secretary Mazur, and Commissioner Rettig:
For the last twelve months, taxpayers, practitioners and the IRS have been dealing with unprecedented circumstances associated with the Covid-19 pandemic. Every tax filing season is fraught with uncertainty. Unfortunately, the circumstances associated with the 2021 filing season are outside of the control of taxpayers, practitioners, and even the IRS. There has been late Congressional action, issues with mail, and many taxpayers still reeling from the effects of the pandemic.
Currently, the best estimates show that only about 15% of the population has been fully vaccinated. That percentage will not grow nearly great enough by April 15th to reach ‘herd immunity’. The National Conference of CPA Practitioners (NCCPAP) prides itself on our focus of serving the individual and small business taxpayers. Many taxpayers are either reluctant to leave their houses to see their tax preparer or uncomfortable preparing their own returns—even with over-the-counter options. Technology is not always the answer either. Tax paperwork can often be voluminous and impossible to transmit electronically without high powered equipment and high-speed internet access—equipment that many taxpayers do not have. That puts an undue burden on the individual and small business taxpayers in this country.
As an argument against moving the tax deadline, the IRS had released statistics showing a decided increase in the number of returns filed the opening week of this tax season as compared with the prior season. Note that these statistics do not compare apples with apples. There was a nearly three-week delay at the start of filing season 2021 and three weeks in a short filing season is a lifetime.
Tax practitioners have been assisting their clients with filing the forgiveness applications for the initial PPP loans, as well as guiding them through the second round of applications with the SBA. In addition to this, practitioners and the IRS have also been trying to fully understand the nuances and intricacies of the Employee Retention Credits. It seems that not a day goes by without new and improved guidance and resources being released.
Despite the press informing taxpayers to prepare their returns early, practitioners are reluctant to transmit these returns at this time. One of the reasons is due to pending legislation in Congress that would make $10,200 of 2020 unemployment compensation non-taxable. As an example, for taxpayers in a 24% marginal tax bracket, that would amount to a difference in tax liability of $2,448. Taxpayers are left with a decision to wait or file the return and then risk needing to amend the return, which could take 16 weeks or longer for the IRS to process. There are a host of other potential changes being proposed in stimulus bill packages currently under consideration as well.
Finally, even programs with the best of intentions can bring about bad actors. The expansion of unemployment has unfortunately caused rampant fraud. These bad actors steal their victim’s identity and claim unemployment benefits. Affected taxpayers may not be aware of this situation for many months while the various states try to unearth the magnitude of this fraud. Taxpayers will have no ability to accurately file any type of tax return or extension until this rampant fraud is sorted out.
Based on the above issues, along with the well-documented issues with the Post Office, NCCPAP is requesting that the IRS grant an extension for all tax returns and payments due on April 15, 2021 until June 15, 2021.
Very truly yours,
Mark A. Stewart Jr., CPA
Stephen F. Mankowski, CPA, CGMA
Tax Committee Co-Chair, NCCPAP
Sanford E. Zinman, CPA
Tax Committee Co-Chair, NCCPAP
The National Conference of CPA Practitioners (NCCPAP) is a professional organization comprised of Certified Public Accountants practicing in the United States. In addition to serving as a forum for education, networking, and community impact, NCCPAP also advocates for its clients. NCCPAP influences tax administration and tax policy by regularly meeting with Internal Revenue Service representatives, state taxing authorities, and elected officials. NCCPAP members represent over one million businesses and individual clients. The organization is headquartered in Woodbury, NY. For more information visit, www.NCCPAP.org.