Lawyers and accountants who prepare taxes worry that giving electronic filers until April 30 will confuse taxpayers, and no amount of publicity by the Internal Revenue Service will make it clear.
"We could promote our little brains out, and still April 15 is going to be the tax filing deadline," said Tom Linafelt, communications manager for H&R Block. The company prepared tax returns for 18.7 million clients this tax season.
Officials want to extend the deadline as incentive for more people to file electronically, which is less costly and results in fewer errors than mailing a paper return. Rep. Rob Portman, R-Ohio, said lawmakers were willing to risk some confusion to promote electronic filing.
The April 30 deadline would apply only to those who file and pay their taxes electronically, available through a professional tax preparer or by purchasing software to use at home. Everyone else would still have to send their returns by the April 15 deadline.
Tax professionals would rather see the IRS give taxpayers until April 30 to pay any taxes owed to the government if they agree to transfer the refunds electronically, but retain the April 15 deadline for filing the return.
That would encourage taxpayers who send their returns by mail at the last minute — banking on the IRS to have too much paperwork to cash their check immediately — to switch to electronic filing. Simply extending the deadline might just cause people who already procrastinate to wait another two weeks before the last-minute rush to file, tax preparers said.
"Basically, we think it's not going to work," said Mike Chakarun, director of federal and legislative affairs for the National Society of Accountants.
The change is one part of a bill the House passed Thursday with a 252-170 vote. It must be approved by the Senate before it can go to the president and become law.
Much of the legislation is designed to make the IRS a little more friendly to the average taxpayer.
Lawmakers worked to boost the privacy of taxpayers by permitting the IRS to fire any employee who browses a tax returns without authorization.
The bill also would:
- Increase the money Congress can appropriate for low-income taxpayer clinics to $9 million next year and then by $3 million in each of the next two years.
- Allow taxpayers found guilty of minor negligence when preparing and filing their returns to get a one-time waiver of penalties and interest. The provision is designed to limit unreasonable charges caused by honest mistakes and confusion, not systematic or repeated tax fraud.
- Permit people who cannot pay their entire tax bills to enter an installment agreement to pay less than the full amount. The bill asks the IRS to study the cost of imposing liens and levies to collect unpaid taxes. Lawmakers want to know whether the cost of imposing the penalties outweighs money they could collect.
- Take away the tax-exempt status of organizations found to have connections to terrorism.
By Mary Dalrymple