AICPA highlights tax filing shortcomings related to coronavirus relief

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The American Institute of CPAs has posted a set of frequently asked questions and answers aimed at helping CPAs and their clients with tax filing and tax relief in response to the novel coronavirus pandemic, while pointing out the various shortcomings in the federal government’s response to date.

The FAQ document notes, for example, that while the pandemic has closed business offices around the country so taxpayers may not received their mail and correspondence from the IRS, the agency still isn’t making things easier. “Unfortunately, the IRS has not expressly announced any relief for affected taxpayers in regards to correspondence,” said the document. “AICPA will continue to urge Treasury and IRS to provide generous and automatic relief for issues related to administrative actions such as expiring statutes of limitations, the processing of correspondence, and other actions not already covered by previous relief related to COVID-19.”

The AICPA has been pressing the IRS and the Treasury Department to expand its relief beyond the various due date extensions that have been announced already. Another area where tax relief is coming up short is in terms of the federal disaster declaration and how the IRS has responded to it.

“Typically, when the President invokes the Robert T. Stafford Disaster Relief and Emergency Assistance Act, taxpayers are granted broad payment and filing relief under section 7508A,” said the AICPA. “However, the IRS’s approach to COVID-19 has not been consistent with how the agency treated tax payment and filing deadlines over the last several years following a federally declared disaster. The AICPA continues to advocate the need for comprehensive relief with Treasury and IRS officials. This is a priority for our members.”

Earlier this week, AICPA president and CEO Barry Melancon (pictured) sent a letter to Treasury Secretary Steven Mnuchin asking for the Treasury and the IRS to extend more of the tax deadlines confronting taxpayers beyond the initial extension from April 15 to July 15.

“We believe it is impractical, if not impossible, for taxpayers and their advisors to continue business as usual when IRS’s own operations are minimally operable,” Melancon wrote.

The AICPA renewed a request for an immediate expansion of tax-related relief to all types of returns and payments due between March 3rd and July 15th and outlined several outstanding issues, including:

  • Other forms and elections: The due dates of additional forms and elections, such as the election to be taxed as a small business, need additional time.
  • Individual and corporate estimated payments: The first quarter individual and corporate estimates, which are typically due on April 15, were deferred to July 15. However, the IRS has not yet extended the second quarter deadline, which is still set at June 15.
  • E-signatures: It is also important for the IRS to take whatever measures are possible to allow taxpayers and their preparers to utilize technology, such as e-signatures, to keep a safe distance from others during the pandemic.
  • Information and other returns: Other returns due between March 3 and July 15, such as for certain estates, exempt organizations and other businesses, also need relief.
  • International filing situations: U.S. citizens living abroad or non-resident taxpayers who cannot leave may also be challenged to file.
  • Payment, penalty and administrative questions: The Treasury and IRS should offer generous and automatic relief for other issues related to administrative actions such as expiring statutes of limitations, the processing of correspondence, and other actions not already covered by previous relief but related to COVID-19.

To help CPAs educate and advise their clients, the AICPA has created a resource center dedicated to the Small Business Administration’s new Paycheck Protection Program that was included as part of the recently approved CARES Act, highlighting the emergency funding available to offset the impacts of the coronavirus on a client’s business, and a co-brandable tool to help small business clients understand the new funding option. Other tools include payroll calculators for loan applications, with three calculators for calculating maximum loan amounts depending on how long the business has been in operation and whether it’s seasonal. The Paycheck Protection Program has been off to a rocky start since it debuted last Friday, with many small businesses complaining that getting access to the promised loans has been nearly impossible.

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AICPA Coronavirus Tax relief Barry Melancon Tax season IRS Treasury Department SBA