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On Tax Day, IRS Readied for Flurry of Last-Minute Filings

Ruth Singleton
Published Date:
Apr 15, 2024

On Monday, the IRS was preparing for an onslaught of last-minute filings, Accounting Today reported. Most U.S. taxpayers faced an April 15 deadline, butthose in Maine and Massachusetts have until April 17 because they observe the Patriots' Day holiday on April 15 this year, the IRS announcedIn addition, April 16 is the Emancipation Day holiday in the District of Columbia. Moroever, taxpayers in disaster areas, certain active-duty military members and citizens living abroad automatically get more time to file.

The IRS has already received more than 100 million tax returns, and tens of millions more were expected to be filed before the deadline, the agency reported. For the week ending April 5, the agency reported having received 101,849,000 tax returns, representing an 0.5 percent increase over the same time period last year. The number of returns that it processed was 100,110,000, which was 0.3 percent less than the comparable period last year. In addition, the agency estimates that 19 million taxpayers will file for an extension this year.

"Delivering tax season is a massive undertaking, and we greatly appreciate people in many different areas working long hours to serve taxpayers as the tax deadline approaches," said IRS Commissioner Danny Werfel in a statement on April 12. "This effort reaches far beyond the IRS and includes hard-working tax professionals, software providers, the payroll community as well as our colleagues in the state tax agencies. Their work helping taxpayers makes a difference." 

The IRS has offered some last-minute filing tips, along with online tools and resources. The agency noted that for taxpayers who need an extension of time to file their taxes, there are several options to get an automatic extension through Oct. 15. Although an extension grants extra time to file, it does not extend the obligation to pay taxes due on April 15, 2024. To avoid penalties and late fees, taxpayers who owe should pay either their full tax bill or at least what they can afford to pay by the April 15 deadline.

Accounting Today reported that this tax season has gone fairly smoothly, due to the lack of major changes in the tax laws. The House passed tax extenders legislation in January, but that bill has remained stalled in the Senate, because of growing opposition from Republicans on the Senate Finance Committee. Had the legislation passed, it would have required IRS programmers to make some mid-tax season adjustments in how much could be claimed on the Child Tax Credit. It would have also revived a number of expired business tax breaks. 

The IRS has been taking advantage of expanded funding from the Inflation Reduction Act of 2022 to improve its technology and customer service, even though the original $80 billion appropriation over 10 years has been reduced to $60 billion.

"I would say that overall things are better," said Eric Bronnenkant, director of tax at investment adviser Betterment, in an interview with Accounting Today. "Obviously, if you compare them to during the pandemic, when they passed all these stimulus payments and all sorts of special provisions due to the pandemic, that definitely made things a lot more complicated. While I know that there are many people who miss some of those special pandemic provisions, the fact that we've gotten back to a more stable, normalized level has arguably made the overall tax-filing season smoother, but not perfect."

The IRS's Direct File free tax pilot program, launched last month, has been operating in 12 states—Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. The Department of the Treasury reported that it is seeing steadily increasing usage of the program. The IRS hopes to expand the pilot program next year more widely with additional features, according to Accounting Today. 

In an interview with Accounting Today, Ayushi Roy, deputy director of New America's New Practice Lab, which helped carry out a feasibility study for developing the Direct File system, said, "We are actually doing some more user research right now with Spanish-speaking filers. We don't have a clear sense which tax scenarios ought to be prioritized if this is continued. We might find that something like student loans is actually maybe a scenario to cover, or joint filing or shared custody. We don't have that information yet. There's sort of a top 10, but whittling it down is still a work in progress."

If the Direct File program continues, Roy said that she doesn't see that as a threat to professional tax preparers.

"Last year, of the 162 million returns that were filed, 150 million were electronically filed, and more than half of that, 85 million specifically, were filed by tax professionals," said Roy. "That's a higher ratio of preparation by professionals than self-preparation by software than previous years. That trend is actually really interesting, and I am interested in seeing how that figure ultimately lands this year. It is worth noting, though, it will be hard to evaluate by April 15 because we have so many natural disaster-related extended filers, particularly in California and some other states that dealt with fires and flooding in the past filing year, so I don't know how much we'll be able to tell from the data after the 15th versus data in the fall."

There will also be a place for commercial tax software, and some of the vendors in the Free File program and beyond appear to be lowering their eligibility requirements, Accounting Today reported.

"The Direct File program is not in the business of taking over the process of tax preparation," said Roy. "The tax preparation landscape is rightfully varied, with lots of options for different people that work for different situations. That's the right way for the landscape to exist. The purpose of the Direct File program was an effort to fill a gap in an existing market, and if that gap can be filled through other means, including lifting income eligibility restrictions in TurboTax and H&R Block, that to me feels like a win."



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