AICPA Raises Concerns About Delayed, Compressed Tax Season

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.

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.

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

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.”