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03/04/2013

Late Forms from IRS Lead to Protest

The American Institute of CPAs (AICPA) has written a formal letter of protest to the IRS about its late release of crucial tax forms for the 2012 tax season.

The IRS must update 31 forms, many of them having to do with business tax returns, following the late enactment of tax legislation (mid-January).  Some of the forms have been released for tax preparation, but many are still in the process of being reviewed.  Closeup of clock

The AICPA is calling on the IRS to consider granting taxpayers relief from late filing penalties under the tax code provision that allows such relief in “unusual circumstances”.  The AICPA says taxpayers should not be held responsible for delays caused by Congress and the IRS.

At McRuer CPAs, we find the tax changes and delays will lead to both good and not-so-good results.

Good news:

  • The tax rate changes and Alternative Minimum Tax (AMT) patch enacted are permanent.  That now makes possible longer-term planning for those items and eliminates taxpayer uncertainty about what may happen in the future.

Not-so-good news:

  • Late filing may hurt lower income individuals by delaying refunds they depend upon for necessities like paying rent and purchasing food.
  • Late filing complicates business income tax filings. Many forms necessary to complete business returns were released only last week and many are still not approved.  This will likely expand the number of businesses who must request extensions of time to file, and make it more difficult for these businesses to budget their tax payments if they owe tax.
  • Due to the Congressional delay, many returns will be started at least two weeks later, but the IRS is not, at this point, providing any additional time to file beyond the March 15th and April 15th deadlines without facing a penalty.

McRuer CPAs has added additional team members and they are available additional hours, including weekends, to serve our clients as the tax filing season rush goes into full throttle.

While it is highly likely we will be forced to request more filing extensions than in the past, we are well positioned to properly address payments required and other concerns associated with requesting extensions of time to file.

Each year we deepen our team’s experience and training as we continually improve our systems to accurately and efficiently process our clients’ returns.

This year we have expanded our digital technology services to include MySafe Exchange, an internet-based client data collection and delivery system.  Our clients are responding enthusiastically to this system because it saves time, is accessible 24x7, and dramatically enhances data security and convenience.

Meanwhile, CPA firms and organizations throughout the country are doing their part to petition for taxpayer relief.  These organizations are raising a question of fairness, as taxpayers wait on the IRS, though IRS deadlines aren’t waiting for taxpayers.

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