October 15 Deadline Encroaching



While many taxpayers and preparers are still dealing with the fallout of the coronavirus pandemic, the IRS extension of Oct. 15 for numerous tax deadlines remains unchanged, days away. Aside from taxpayers affected by natural disasters, tax practitioners are expressing overwhelm in the face of ongoing Paycheck Protection Program (PPP) loan drama on behalf of their business clients and the onslaught of individual and corporate clients scrambling to make that Oct. 15 deadline.    

More than 12 million people asked for more time beyond the original July 15 extension to file their taxes, CNBC reports, and tax preparers are reporting that COVID-related slowdowns are to blame. “The extensions I had this year were people who had accounting and bookkeeping issues and couldn’t file on time because they needed to get those issues resolved for their small business,” Nayo Carter-Gray, enrolled agent and CEO at 1st Step Accounting in Towson, Maryland told CNBC1.  

According to the Journal of Accountancy, the AICPA and the IRS have discussed the potential for missed deadlines beneath the added weight of COVID-19. According to the organization, practitioners that make good faith efforts to file on behalf of their clients by the deadline, but are still unable to meet it, should detail their reasons for missing the deadline in an attachment to the return titled “COVID-192.” It is also suggested that writing “COVID-19” at the top of the return could indicate a need for penalty relief. Additionally, practitioners may want to contact their filing software provider for guidance on proper form notation, particularly regarding state-specific disaster codes.  

The MICPA advises its members facing potential missed deadlines to keep detailed records and notate returns accordingly. Also, remember that the IRS provides for ‘reasonable cause’ exceptions which allows the IRS to grant relief from penalties that would otherwise apply in the case of a missed deadline.  

The MICPA will continue to monitor this, and other related issues closely, interested members can subscribe to our weekly newsletter or follow us on social media to stay informed as new developments occur. 

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Source: MICPA

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