With the coronavirus continuing its spread, Treasury Secretary Steven Mnuchin announced on Twitter on Friday that the Trump administration would extend the tax-filing deadline for 90 days.
But the delay at first only applied to making a tax payment. Taxpayers were still required to file their returns or apply for an extension by April 15 or face a penalty.
The decision not to delay the filing deadline at the same time as the payment deadline alarmed many tax professionals, who feared that even filing for an extension would be difficult for many people.
Frankly, the way this was all done indicates how inept the administration’s response to the coronavirus has been. It was idiotic not to announce from the start that both payments and filings would be delayed.
A bipartisan group of senators introduced legislation Thursday to push Treasury to act. AARP supported the bill, arguing that synchronizing the deadlines for filing and paying federal income taxes was just common sense.
On Friday, a day after the senators introduced the Tax Filing Relief for America Act, Mnuchin tweeted, “At @realDonaldTrump‘s direction, we are moving Tax Day from April 15 to July 15.”
It’s pathetic that Mnuchin is trying to credit President Trump for this decision rather than acknowledging that there was a lot of outside pressure to do so.
I have no doubt that the IRS didn’t see this coming. Two days before Mnuchin’s tweet, the agency issued a news release that specifically said, “The filing deadline for tax returns remains April 15, 2020.”
Governors and mayors across the country are asking — or, in some cases, requiring — businesses to shut down. The decision to keep the usual filing deadline didn’t reflect the real-world difficulties tax practitioners and their clients are experiencing, Barry Melancon, who leads the American Institute of Certified Public Accountants (AICPA), complained.
The filing delay is needed given that health officials are urging people to stay home, making it difficult for folks to meet with experts for tax assistance. Nearly 60 percent of all taxpayers turn to a tax practitioner to prepare and file their returns, Melancon said.
“I have two sisters, both in their 70s, who live in a small town in the Midwest,” a reader wrote. “They and their elderly husbands have serious underlying medical problems so are self-isolating to keep from being exposed to the coronavirus. Since they don’t have the technical ability to file their tax returns online, each year they take their tax information to a local tax preparer.”
Even though applying for an extension is fairly easy, filling out the form is not simple for many people, because they still have to estimate their tax liability and may need help with the calculations.
“While much of the taxpaying public is comfortable with technology, the older population is generally not, and they have great need for the advice from a tax preparer,” Melancon noted, adding that elderly citizens are more vulnerable to the coronavirus.
Melancon said his organization is hearing from CPAs all over the country about their struggles — ill staff; no access to offices, where they work more efficiently; concern about elderly parents; pregnant spouses; kids in the house because they don’t have school.
“CPAs are suffering from the same challenges as everyone else,” he said.
The AARP Foundation suspended its free Tax-Aide service until further notice out of concern of spreading the coronavirus.
It’s important to note that your state taxing authority may still require you to file and pay your taxes on time, although many states plan to follow the federal government’s lead in granting extensions. The AICPA is keeping an updated list of states’ tax relief efforts at aicpa.org. Search for “State Tax Filing Relief Chart for Coronavirus.”
If you’re getting a refund, try to file your tax return as soon as possible. With direct deposit, the IRS says it issues nine out of 10 refunds in about 21 days. If you wait until July 15, you won’t get your money until mid-August at the earliest.
If you’ve been procrastinating about filing older returns, get them done, too. There is a three-year window from the original deadline of your tax return to claim a refund.
Last year, the IRS said an estimated 1.2 million taxpayers hadn’t filed their return for 2015. The agency estimated they were owed a total of $1.4 billion, or a median potential refund of $879.
Especially in these uncertain times, don’t leave any money on the table. You may need it sooner than you think.
Have a question about retirement or personal finance? Join Michelle for an online Q&A every Thursday at noon Eastern. Readers may write to Michelle Singletary at The Washington Post, 1301 K St. NW, Washington, D.C. 20071 or firstname.lastname@example.org. To read previous Color of Money columns, go to http://wapo.st/michelle-singletary.