Tax Pros Oppose Deadline Change: The proposed change in the due date for electronically filed returns to April 30 is bad tax administration and tax policy, according to preparers of most of the professionally prepared returns in the United States.
In a joint letter to the Senate Finance Committee, the American Association of Attorney-CPAs, the American Association of CPAs, the National Association of Enrolled Agents, the National Society of Accountants, H&R Block, Jackson Hewitt Tax Service, and Padgett Business Services said that a change in the date from April 15 to April 30 for electronic filers would create taxpayer confusion.
Moreover, the letter noted, taxpayers who intend to file electronically by April 30, but are unable to do so and have failed to request an extension, will have missed the April 15 due date for the extension request and will face late-filing penalties.
The groups pointed out that taxpayers might mistakenly believe that their state tax returns are extended. In addition, they charge, the change would create estimated tax problems since many taxpayers won’t understand that their estimated taxes are due before their returns are due.
“The impact of a change to April 30 will be minor in terms of positives, but the negatives will be considerable,” said John Hewitt, chief executive of Liberty Tax Service. “It could cause a lot of turmoil.”
GAO says IRS Random Audit Research On Track: The National Research Plan being implemented by the Internal Revenue Service is on track to meet its goal of getting quality research results while minimizing taxpayer burden, according to the General Accounting Office.
IRS officials have completed the development and testing of NRP processes and have selected and trained staff members to carry out the program. In addition, the IRS is nearing the completion of case building and has made progress in classifying NRP returns, GAO research indicates.
The IRS needs up-to-date information on voluntary compliance in order to assess and improve its programs. Its last detailed study of voluntary compliance was done in the late 1980s, so the agency decided to carry out the random audit program to perfect its techniques.
IRS auditors are reviewing about 47,000 randomly selected individual tax returns from 2001. In June 2002, the GAO reported that the NRP was necessary, its design was sound, and that it appeared to meet the IRS’s goals of acquiring useful compliance data while minimizing the burden on taxpayers.
As the IRS completes NRP case building, classification and audits, it is implementing quality assurance steps, including efforts to ensure that key audit steps are completed on all NRP audits before they are formally closed with taxpayers, according to GAO findings.
As of the end of March 2003, the IRS had completed the following tasks:
● 93.9 percent of case building;
● 73.1 percent of classification; and,
● 9.3 percent closed audit cases.
The GAO made no recommendations in the report because it was satisfied that the IRS is following through sound research plans in the ongoing implementation of the NRP.
EFTPS Online Gets Major Upgrade: The Internal Revenue Service has upgraded the Internet version of the Electronic Federal Tax Payment System to include several new improvements to help taxpayers.
Taxpayers will now be able to schedule at one time all four estimated tax payments, Form 1040ES, without logging out; access payment history for a 16-month period of time; and search, print or download payment history by date, tax type, amount, tax form and other factors.
In addition, they will be able to change bank accounts by phone without completing a new enrollment, and access links to states with electronic tax payment systems directly from the EFTPS Web site.
Previously, taxpayers could schedule only one estimated tax payment at a time, and then would have log out before scheduling another. Payment history was available for only 120 days, And the payment history search and sort feature was not available.
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