The IRS wants us to invent the 48 hour day

"Tax season" as we all know it is an American tradition. For a few months at the beginning of each year everyone is scrambling to find receipts, W-2 forms, mortgage interest, business profits, etc. so that they can get to their tax accountant and find out the good or not-so-good news about their tax bill.  

Most years there is a practical window of about 10 weeks to get all this accomplished, from the first week of February through April 15 (remember, most of us don't even receive all our paperwork from third parties until the end of January).  For me as a CPA, this is my claimed reason for my current hair style, or to be more candid, lack of hair much at all. I've chosen to let my genetics off the hook for this one.

In early January, the IRS announced a delayed, Jan. 30, start to the 2013 tax filing season, and it did not start accepting business tax returns until Feb. 4. The IRS also announced that, because of the need for extensive form and processing systems changes, many taxpayers would not be able to file returns until March -- and when in March we still do not know.

Jeffrey Porter, chair of the AICPA’s Tax Executive Committee, sent a letter to Steven Miller, acting commissioner of the IRS, on Friday raising concerns about the “very compressed and difficult filing season” AICPA members and their clients are facing, due to the ongoing delays in the IRS’s acceptance of certain tax forms.

The IRS published a list of forms that it would not be able to accept on Jan. 30. Currently, there are still 29 forms that cannot be filed because they must be updated and systems for processing them tested. The IRS has said it will start accepting returns that include these delayed forms in the first week of March, but has not given a specific date. In his letter, Porter expressed concern about the continuing delay in the release of these forms and asked the IRS to clarify when those forms will be available.

Business returns

Porter expressed to the IRS particular concern “about the impact the delays in forms releases will have on the processing of partnership, S corporation, C corporation and other business returns due on March 15.”

He noted that preparers may have only seven days to complete these returns, and he raised the issue of returns that require Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, an “extremely complicated” form that “it will be a challenge to complete the filing of” by the March 15 due date.

Individual returns

Porter also raised the issue of problems individual taxpayers are having with the delays—“particularly taxpayers who file one of the delayed forms or needs a Form K-1 from a flow-through entity in order to file their return.”

AICPA recommendations to the IRS

Porter wrote that the AICPA wants to enter a dialogue with the IRS on three issues:

  1. Sec. 6651 failure to file and failure to pay penalties. The AICPA requests that the IRS “should instruct tax examiners to more readily accept grounds for reasonable cause relief if the taxpayer’s facts demonstrate that the challenges of this tax season caused the return’s delinquency”;
  2. Sec. 6654(e)(3) estimated tax penalty relief. The AICPA asks the IRS to consider granting estimated tax penalty relief based on the unusual circumstances surrounding this tax season and “for reasons of equity and good conscience”;
  3. Clarity in the release of tax forms. The AICPA requests the IRS to provide “more clarity about the timing for the release of the remaining tax forms.”

To be fair about it all...

Now, to be fair about it all I cannot put this mess on the shoulders of the IRS. That burden goes to the White House, House of Representatives and Senate for their complete lack of ability to work together and get the real work of our country done in any timely manner. It was our elected politicians and their brinkmanship that chose to pass significant lax law changes the first week of January 2013.  So, my hat is off (and exposing my bald results of dealing with the tax laws) to those at the IRS scambling to clean up the political administrative mess that has been thurst upon them. 

What does this mean to you?

What this means to you as a taxpayer is that you may find it taking longer to get your returns filed this year, longer to receive all your 1099s and Form K-1s and you may be much nearer to the April 15 due date before you and your tax professional can figure out just where you stand tax-wise. So, have a cup of coffee (since we're talking taxes only decafe is allowed), pick up a good book and patiently wait for it all to play out.

Or, if you need something more theraputic to do, use the time to fire off a few letters to your elected representatives telling them to knock off the ultra right or left partisan bologna (I'd rather use a differnt description that is the same as my initials, but don't want to offend anyone) and get to the buisness of real representative governing.

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