Washington, D.C. (March 25, 2021) – Two large member organizations representing tax professionals in the U.S. – the American Institute of CPAs (AICPA) and the the National Association of Enrolled Agents (NAEA) – are urging filing and payment relief for all taxpayers for the 2021 tax filing season. In a letter to the Department of the Treasury and the Internal Revenue Service (IRS), the groups expressed disappointment in last week’s announcement to extend the filing deadline – but not the estimated payment deadline – to May 17th, which excludes many taxpayers and arbitrarily discriminates against different types of taxpayers.
“In particular, the announcement ignores challenges many small businesses and other taxpayers have suffered as a result of the pandemic,” the letter states. The letter also explains that the decision, “…fails to recognize the millions of small businesses and the self-employed taxpayers, such as Instacart workers and Uber drivers, that have faced unheard of hardships and economic challenges caused by the Coronavirus pandemic and must calculate and make estimated payments.”
Small businesses, who are the backbone of the American economy, have faced incredible hardship as well, with many struggling to remain open. The U.S. economy has suffered greatly as a result of the COVID-19 pandemic, forcing many Americans to lose jobs and struggle to support themselves and their families. Many of these people have sought other ways to make ends meet, including driving for food delivery services or selling handmade products using online platforms. These workers – who must use estimated payments to pay their taxes – have faced incredible hardship and are among our most vulnerable. However, due to the nature of their work, the IRS’ tax deadline postponement gives them no relief.
Many additional stakeholders are expressing disappointment in the IRS’ decision to omit small businesses, self-employed taxpayers and others from this relief. Here’s what they are saying about the selective IRS’ relief:
“Estimated tax payments are not made by just the wealthy. Any individual who is a small business owner is most likely going to have to make estimated tax payments during the year to cover their potential tax liability. Not all business owners are wealthy. Most actually fall into the lower- and middle-classes… By failing to include estimated tax payments, fiduciary tax returns, and corporate tax returns in the extension to May 17, the IRS fails to recognize the real-world stresses of the past year that have been imposed on taxpayers, small businesses, and tax practitioners.”
- March 22 letter, National Conference of CPA Practitioners
“As small businesses continue to recover from the challenges imposed by government mandated shutdowns, the IRS should be focused on making it easier to pay quarterly estimates accurately. Failing to do so makes a difficult situation even harder for restaurants, landscape companies, and a host of additional small businesses who are trying to keep the lights on and the doors open.”
- House Committee on Financial Services Committee Hearing, Representative Bill Huizenga (R-MI)
“While many of our members supported the delay, most of them have voiced their concern for the limited nature of the extension. They are worried that it might actually increase complexity for many enrolled agents and their clients.”
- Meg Killian, Executive Vice President for the National Association of Enrolled Agents
"The National Society of Tax Professionals (NSTP) feels that it would be in the best interest of the American taxpayer to have consistency within the tax filing requirements. The first estimated tax payment due date for the current year should coincide with the due date of the prior tax return - and this becomes particularly important if the taxpayer plans to apply any overpayment on their 2020 tax return to the current year taxes so that it would be considered a timely payment. Matching due dates would also assist with tax planning for the current year and determining the appropriate amount of estimated taxes that would be due for 2021."
- Nina Tross, Executive Director, National Society of Tax Professionals
“Extending the deadline for tax year 2020 personal income tax returns from April 15 to May 17, 2021 is a good idea, however, not all taxpayers will be able to take advantage of the extension the way it is intended to be. Our members serve a very large community of small to medium size business owners which are sole proprietors, Subchapter S Corporations and partnerships. The vast majority of these taxpayers file and pay estimated taxes. While the filing of the 1040 has been extended to May 17, the filing of estimated payments has not. Latino Tax Professionals Association would like the IRS to align all April 15 deadlines to the May 17 extension date. Aligning these deadlines for all taxpayers will help ease the complexity of filing and paying taxes as well as help these taxpayers during the difficult and challenging times we have all had with this terrible pandemic.”
- Carlos Lopez, EA, Executive Director, Latino Tax Professionals Association
“The omission of select taxpayers, including those that make quarterly estimated payments, as part of the deadline extension is a critical issue impacting millions of taxpayers and practitioners nationwide. Our organization, a nationwide consortium of Black and other minority owned CPA and financial services firms, provides services to businesses of all sizes, and we’re seeing directly, and daily, how this problem is affecting our clients, adding confusion and frustration to an already struggling business environment.”
- Anthony G. King, CGMA, CPA, Executive Committee Member, Diverse Organization of Firms (DOF)
“The inconsistency of filing deadlines is causing confusion and hardship for countless taxpayers. Many individual filers are also small business owners whose goal is not to ‘game the system’, but rather to survive through uncertain times. By aligning the filing dates, confusion is reduced, and fairness is established for the taxpayer.”
- Scott Artman, CPA, CGMA, Executive Director, National Association of Tax Professionals
“In extending the general filing deadline to May 17, the IRS has excluded a key population – those filers who need to file a 2017 return claiming a refund. As it stands, after April 15, those refunds will expire. We encourage the IRS to align the deadline for other filings and payments, including the deadline for 2017 returns claiming a refund to May 17. Not doing so could cause thousands of low-income households to lose out on their refunds, at a time when they need it most, creating an undue hardship, especially for those eligible for the EITC, and those who are not able to access free tax preparation services prior to April 15.”
- Rebecca M. Thompson, Director, Field Engagement & Taxpayer Opportunity Network, Prosperity Now
“While we all understand the challenges caused by extending due dates, we must make sure that if we offer an extended due date it is fair and understandable. We are afraid that most people will only hear the due date was extended to May 17 and will not understand that it only applies to some forms and returns. Therefore, to avoid taxpayers incurring penalties and interest, because they do not understand the finer points of an extension, we should have a consistent date of May 17.”
- Roger Harris, President, Padgett Business Services
Feb 16, 2021: The AICPA sent a letter to the Department of the Treasury and the IRS calling attention to the hardship that millions of taxpayers and tax practitioners are facing while making good faith efforts to comply with their tax obligations. The AICPA called for relief from underpayment and late payment penalties for the 2020 taxable year.
Feb 24, 2021: The AICPA sent a letter urging the Department of the Treasury and the IRS to provide taxpayers with more certainty and stability by announcing any pending tax filing and payment deadline postponements. Additionally, the AICPA called for Treasury and the IRS to provide underpayment and late payment penalty relief, delay collection activities and expand the temporary e-signature relief to the millions of taxpayers affected and working through the challenges created by the COVID-19 pandemic.
March 2, 2021: A subsequent statement released by the AICPA again urged action by Treasury and the IRS and reiterated the need for filing and payment extension and urgency of doing it now.
March 4, 2021: The AICPA sent a letter to the Department of the Treasury and the IRS calling for the extension of the filing and payment deadline for the 2020 tax year to June 15, 2021.
March 16, 2021: The AICPA released a statement addressing criticism of a deadline postponement and reiterating the need for a payment and filing deadline extension to June 15th.
March 17, 2021: The AICPA released a statement following the announcement by the IRS that it would extend the filing and payment deadline for some – but not all – taxpayers for the 2021 tax season from April 15th to May 17th.
March 18, 2021: The AICPA released a statement in response to testimony provided by Commissioner Rettig before the House Ways & Means Oversight Subcommittee
Veronica L. Vera