If there’s one thing I’ve learned in the 37 years of working at the AICPA, it’s that you don’t want to mess with tax filing season. Sure, tax season is never “easy” and spreading the work over a longer period is important. But most CPAs just want to get it over with. I was in practice before I came to the AICPA and I can still empathize with these sentiments all these years later.
Minimizing tax filing season disruptions and changes is important to the IRS, too. Sure, there have been a few snafus over the years. But, by and large, the IRS manages massive amounts of data well and it does us proud in administering a system with 156 million individual returns and 112 million refunds amounting to $321 billion. The average refund is about $3,000. April 15 is prominent in the IRS’ psyche because it’s prominent in the psyche of the American public.
The focus on April 15 as Tax Day changed, at least for this year. Surviving a pandemic was for history book reading or maybe a scary movie. But now it seems to consume us every day. I’m proud of the AICPA for all that we have done, and continue to do, to support our members, the business community and government. Much information is available, for example, in our AICPA Coronavirus (COVID-19) Resource Center, our SBA Paycheck Protection Program resources for CPAs, and in our Coronavirus (COVID-19) tax resources.
Before I go back in time, I want to thank Treasury and the IRS for providing the broad relief that we advocated for and taxpayers and their advisers needed. On April 9, the IRS released Notice 2020-23. Taken together with Rev. Proc. 2018-58 — listing “time-sensitive” actions that are postponed — and FAQs relating to payroll taxes, the IRS has filled most of the blanks of the accommodations necessary for the pandemic emergency.
My wheelhouse is tax policy and advocacy. Around the first of March, my team started thinking ahead to March 15 and April 15. Was there a COVID-19 stumbling block? How could we avoid that stumbling block? Then the calls and emails from across the profession started coming, especially from CPAs in California, Washington state and New York — the areas hit early and hardest by COVID-19. They weren’t the usual CPA messages; they were messages enveloped in pain and anxiety. Clients, staff and families were getting sick. Everyone was working at home — not always effectively — and schools started to close. It became clear that the next several months — tax filing season — would be like none we’ve experienced. We fought off Freud’s “illusions” and took what we knew would be a tough road for some members and the IRS. Tax filing and payments would need broad relief well beyond April 15.
The AICPA advocated for relief in every way possible. Many of our members, state CPA societies and those on Capitol Hill helped us. We thank them for their leadership and commitment to clients of all stripes. In particular, we appreciate the efforts of Sen. John Thune (R-SD), who introduced a bill to help get us on the road to obtaining broad relief.
As filing season has progressed, the IRS has appropriately, but significantly, curtailed much of its operations for the health and safety of its employees and taxpayers. This makes it impractical, if not impossible, for taxpayers and their advisers to continue business as usual. This was a significant reason for our strong advocacy efforts. (You can follow all of our advocacy initiatives in our Coronavirus (COVID-19) tax advocacy resources page.)
While we appreciate the broad relief the IRS provided, we continue to urge Treasury and the IRS to develop a contingency plan for the next relief phase, should that be needed. We cannot wait until a few days before July 15 for the IRS to release that plan. The entire tax community deserves and needs early notification. Other issues are drawing our immediate attention, such as (1) making sure the payroll tax FAQs are updated; (2) having the IRS clarify the services that are open — and not just the ones that are closed; (3) pushing for an early re-opening of the practitioner priority services line when it’s safe to do so; and (4) advocating for expanded e-signature availability.
Given the unprecedented COVID-19 spread, as a country, we should not risk anyone’s life to meet tax filing obligations, including IRS personnel. Freud also said, “Out of your vulnerabilities will come your strength.” We hope that, out of all the challenges we struggle with today will come a better, more agile and workable tax system in the future. Stay healthy and safe.
Edward S. Karl, CPA, CGMA, Vice President of Taxation, American Institute of CPAs