IRS says July 15 tax filing deadline won’t be extended

If you were hoping to get some additional time to pay your tax bill, IRS Commissioner Charles Rettig says, don’t plan on it.

In testimony to the Senate Finance Committee, Rettig said the July 15 tax-filing deadline would not be extended.

Because of stay-at-home orders in the wake of the coronavirus pandemic, the April 15 deadline to file a federal return was shifted to mid-July. In an interview late last month, Treasury Secretary Steven Mnuchin had said he was “thinking about” another extension.

But last week, Rettig said that’s no longer the case, telling senators that “too many dates begins to get a little confusing.”

National Treasury Employees Union president Tony Reardon disagrees. Reardon argues that the IRS should push the tax deadline to Oct. 15 for all taxpayers. Typically, Oct. 15 is the deadline for people who file for an extension during a normal tax season.

“I still hold the view that it is important to change the filing season to be extended to October 15,” Reardon said in an interview. “That would give the IRS more breathing room. It would give more time to make sure that all the social distancing that needs to take place on the campuses and other workplaces are able to happen. … And it gives them more time to get the work done that they need to get done.”

With a significant and troubling increase in COVID-19 cases, Reardon said IRS employees are concerned about returning to their work sites.

“Federal employees should not have to risk their lives to go back to work,” he said. “I think we’ve got to find a sort of a balance between safety and also making sure that the work is done.”

Reardon said another extension would also be better for taxpayers.

“They’ve not been able to get questions answered in all cases.

If they sent in correspondence to the IRS, they haven’t gotten responses. So, this kind of gives the entire system more breathing room. I think it’s really a common-sense response to this whole thing.”

For now, if you owe the IRS, get your return and payment in by July 15. If you need more time, file IRS Form 4868 by July 15 to obtain an automatic extension to Oct. 15. You don’t need to justify why you will miss the tax deadline.

Be aware that an extension does not mean you can postpone your payment, too. Rather, it just allows extra time to file your federal return. If you can’t pay your total debt, pay as much as you can, and ask for a payment plan, something you can easily do at irs.gov. Stay away from companies offering tax debt settlement. Such services are costly and often don’t deliver promised relief.

Despite office closures and other extreme conditions as a result of the pandemic, IRS employees have done some exceptional work.

“I want to acknowledge the tremendous job the IRS has done,” National Taxpayer Advocate Erin Collins said in her first report to Congress. “The IRS has postponed over 300 filing, payment, and other time-sensitive deadlines while undertaking to quickly disburse the Economic Impact Payments (EIPs) authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.”

Nonetheless, Collins listed a number of issues that have adversely impacted taxpayers.

As Collins noted, taxpayers have complained about the tremendous backlog created when the IRS stopped processing paper returns. As of May 16, there was a backlog of 4.7 million paper returns, Collins reported to Congress.

Rettig addressed this issue during last week’s hearing. He said that the IRS has 12.3 million pieces of mail, which include paper returns.

“We are in the process of a phased-in reopening of some of our operations when and where it is safe to do so,” he testified. “In this regard, we are processing paper returns. We are tackling the backlog of mail and reopening our phone lines. We are prioritizing refunds and customer service operations.”

IRS is processing about a million paper returns a week, the commissioner told senators.

There’s a lot to catch up on, according to Collins. She noted that some returns were mistakenly flagged by IRS processing filters as possibly being fraudulent, delaying the distribution of refunds to filers.

IRS filters are designed to detect identity theft or refund fraud. The “false positive” flagging meant taxpayers had to mail in documentation to prove their return wasn’t fraudulent. The problem is that the IRS stopped opening and processing mail because of the pandemic.

“Refund delays can have a significant financial impact on low-income taxpayers, as refunds often constitute a significant percentage of their annual household incomes,” Collins said in her report. “Notably, some of the refund delays have been generated by claims for the earned income tax credit or additional child tax credit.”

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