2 key House Democrats want the IRS to extend tax filing season, citing 'titanic strain' on taxpayers

• Two House Democrats called on the IRS to extend the tax filing season past April 15.
• The extension would allow taxpayers time to accurately file returns and factor in tax changes in the stimulus.
• Accountants also support an extension to account for prior tax return processing delays from the IRS.

To continue providing economic relief to Americans during COVID-19, two House Democrats called on the Internal Revenue Service on Monday to extend the the 2021 tax filing season past April 15.

Ways and Means Committee Chair Richard Neal and Oversight Subcommittee Chair Bill Pascrell, Jr. said in a joint statement that at the end of February, the number of returns filed was down nearly 25% year-over-year, while only 27% of phone calls to the IRS were answered, indicating that a majority of taxpayers weren't getting the help they needed in filing taxes.

"We want to remind the IRS that many Americans continue to face the same health and economic challenges that necessitated an extension last year," Neal and Pascrell said. "Facing enormous strain and anxiety, taxpayers need flexibility now. We demand that the IRS announce an extension as soon as possible."

Last year, the IRS extended the tax filing season to July 15 - three months later than the usual April filing - and extending it again this year will allow time to account for changed laws within President Joe Biden's American Rescue Plan, according to the statement. This includes unemployment benefits, with the first $10,200 of benefits set to be eliminated from taxation in 2020.

Accountants are also worried about the quickly approaching tax season deadline. In a March 4 letter, American Institute of Certified Public Accountants Chair Christopher W. Hesse, on behalf of the organization with more than 431,000 members, requested that the IRS extend the tax filing season to June 15.

"Maintaining the April 15 filing and payment deadline does not reflect the real-world hardship and challenges imposed on taxpayers and tax professionals," Hesse wrote. "Therefore, we urgently request that the 2020 Federal income tax, information returns, and payments (e.g., extension and estimated payments) originally due April 15, 2021 be granted additional time to file and pay until June 15, 2021."

In defense of the extension, Hesse cited circumstances reflecting its need, including:

• A delay to the start of the 2020 tax filing season;
• The second round of the Paycheck Protection Program required significant assistance to small business clients, and tax professionals are still assisting clients with the PPP's first round loan forgiveness process;
• The IRS' delayed processing of 2019 tax returns;
• And effects on staffing in the IRS due to the pandemic, which has made it difficult to respond to taxpayers' questions.

Hesse also noted that there is still confusion regarding eligibility of the $1,400 stimulus checks, and whether they are taxable.

The Ways and Means Committee said on Twitter on Monday that the April 15 tax filing deadline does not give taxpayers the time they need to file appropriately.

"Taxpayers are facing enormous economic strain and anxiety this filing season," the Committee said. "They need more time to get their questions answered and file accurate returns."