From refund deadlines to tax cheats: Play ball
Today’s column is a “bullpen game.” This is when the team reminds fans of what it is like to watch a contest between 10-yearolds. Every inning or so a new player steps onto the mound.
Postponed vs. extended
Starting today’s game is … when you can file a refund claim for 2019 and 2020 tax filings. Most people have heard they have three years to do so.
The 2019 tax returns were first due April 15, 2020. By tweet, they were postponed to July 15, 2020. I just employed a sleight of hand by saying postponed. The due date was not extended.
The 2020 tax returns were also postponed to May 17, 2021. Again, postponed, not extended. You should demand to know why I keep saying that.
If a return is extended, the period during which a refund claim may later be filed for that year is also extended. A return due April 15 may be extended to Oct. 15.
If you filed your 2019 return on or before April 15, 2020, you have until April 15, 2023, to file a claim for refund if you should discover some reason for such a claim. A 2020 return filed by April 15, 2021, also has until April 15, 2024.
If you filed the 2019 return on July 15, 2020, you also get three full years. The same is true if the 2020 return is filed on May 17, 2021.
If you filed the 2019 return on June 22, 2020, you must file a claim for refund by June 22, 2023. If you file the 2020 return on May 3, 2021, you must file a claim by May 3, 2024.
You do not get a full three years from either July 15 or May 17 because the due dates were not extended. They were postponed. Not the same. And you filed prepostponement deadline.
Taxes and unemployment
Our first reliever enters the game. When dealing with the IRS gets you down, the Taxpayer Advocate Service may be a help. Unless your problem is the taxability of unemployment benefits in 2020.
The American Rescue
Plan, passed in March, allows up to $10,200 of unemployment benefits to escape tax in 2020. For those who filed their returns before this relief was granted, a refund is owed.
IRS says don’t file a claim for refund — they have it all figured out and will just send you the money. Excuse me, I just choked on something. If you think a mistake was made the Taxpayer Advocate says not to call them. The IRS has it. I’m sorry; I may need to seek medical attention.
Upping regulation
OK, I’m back. Let’s bring on a lefty. The Biden administration has announced a plan to improve taxpayer compliance. It’s not a bad plan because it’s the same plan pending since my children were children.
More IRS resources.
Improved technology and use of analytical tools. Also, regulation of the “commercial” tax return preparers that are currently not regulated.
A commercial preparer is not one who advertises on TV. CPAs, enrolled agents, and attorneys are already regulated. The vast majority of preparers are not.
These ideas will help. IRS can stop requiring that returns be submitted on floppy disks (this one is an example of “accountant humor,” consistently ranked one level below “Dad humor”).
Cheats on the Hill
But our final reliever has something to add. I have discovered there is a group of people who bust the federal budget because they are welfare cheats. There are 535 of them, if you can believe that.
These people are paid a minimum of $174,000 per year from the federal government and they have no work requirements to receive this pay! In fact, 435 of them get over $1 million to hire staff and 100 of them get over $3 million for that purpose. Still no requirement to do any work!
And why work? They get a free gym, free parking at local airports, free postage and money to travel. And they are charged with reforming our tax system!
To fix the problems noted above, the first thing we need to do is to pass a law attaching a work requirement to these welfare recipients. Probably won’t happen — they’ve become too dependent on the government.