By Justin Smith
Treasury Secretary Steven Mnuchin announced last Friday that the Internal Revenue Service has delayed this year’s filing deadline by three months from April 15 to July 15. The tax payment deadline has also been delayed to July 15 to provide taxpayers with relief related to the current Coronavirus pandemic.
The announcement also provided that no interest or penalties related to failure to file a tax return of pay federal income taxes will accrue between April 15 and July 15.
Barry Melancon, the President of the American Institute of Certified Public Accountants, stated that “our profession has a tremendous opportunity to create economic stimulus when we help taxpayers submit a refund return.”
The Treasury Department’s notice only applies to federal income tax returns and payments (including self-employment tax payments) and to 2020 estimated tax payments due by April 15. Prior year payments and returns, employment taxes and other taxes have not been directly addressed by the pronouncement.
My advice is that taxpayers who normally receive a tax return should proceed with filing their tax returns as soon as possible, as no delays have been announced in the processing of returns or distribution of tax refunds. Taxpayers who normally face a tax bill (or who expect to) should also consider filing their tax returns promptly so that they can plan for their taxes due, but still have additional time to actually remit payments.
Throughout the current Coronavirus pandemic, taxpayers should keep in mind that many accountants, including me, have multiple options available to clients to help them file their taxes. We can conduct conference calls, use secure online portals to collect and obtain tax documents, collaborate via email, exchange text messages and deliver invoices electronically for payment. Those who prefer to provide paper tax documents can still do so, while preferably exercising discretion and social distancing.
The Alabama Department of Revenue (ADOR) has also offered relief for the current crisis by waiving penalties for late payment of sales taxes. The State also announced it will follow the IRS for income tax filing deadlines.
The IRS has established a special Web site to publish Coronavirus tax relief at www.irs.gov/coronavirus.
ADOR has also published a similar Web site at https://revenue.alabama.gov/coronavirus-covid-19-outbreak-updates/
Congress is currently considering economic stimulus legislation that includes direct payments to taxpayers. While it is hard to predict what may happen, filing your tax return with a direct deposit refund is still the best way to get your hard-earned cash back into your pocket as quickly as possible.
Lastly, be wary of tax scams and phishing/social engineering attempts. The IRS has announced it expects identify thieves to be especially aggressive in trying to defraud taxpayers. The IRS will not call or email taxpayers, or attempt to collect money through payment channels such as money orders, bitcoin or prepaid cards. Visit https://www.irs.gov/newsroom/tax-scams-consumer-alerts for more information, but be sure to remain alert to possible identity theft during this time.
Please reach out to me or your tax professional if you have further questions about your specific tax situation during this time.
Smith is a licensed certified public accountant in Opelika, specializing in individual and small business tax and accounting. He can be contacted at 251-209-2579 or Justin@JSmithCPA.net. His Web site is www.jsmithcpa.net.