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IRS plans to extend April 15 tax deadline by a month, report says

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DISCLAIMER: As the COVID-19 public health situation evolves, new regulations are being continually issued. This page/story/information may not include the most recent information.Tanza Loudenback 41 minutes ago

  • The federal tax deadline will move to mid-May, according to a Bloomberg report.
  • The IRS has yet to confirm the deadline extension.
  • An extension would give taxpayers and preparers more time to file and pay, and the IRS more time to implement new tax laws included in the latest stimulus bill.

The Internal Revenue Service plans to push the 2020 federal tax deadline to mid-May, according to a report from Bloomberg. The deadline extension has not yet been confirmed by the IRS.

In a letter to the IRS and Treasury Department on Tuesday, more than 100 members of Congress asked for the federal deadline to be extended.

“Almost a year [after last year’s tax-filing deadline was extended], we are still grappling with the massive economic, logistical, and health challenges wrought by this devastating pandemic. Millions of stressed-out taxpayers, businesses, and preparers would appreciate an extension of the deadline to file their 2020 tax returns,” they wrote.

The IRS moved the tax deadline back in 2020

Last year, the IRS moved the tax deadline from April 15 to July 15 to give taxpayers and preparers more time to file and pay during widespread coronavirus shutdowns. Most states that tax income followed suit, postponing their deadlines by 60 to 90 days.

The pandemic is still making it difficult for some people to get the help they need, Ways and Means Committee Chair Richard Neal and Oversight Subcommittee Chair Bill Pascrell, Jr. said in a joint statement on March 8.

“Facing enormous strain and anxiety, taxpayers need flexibility now. We demand that the IRS announce an extension as soon as possible,” they wrote.

After the winter storms knocked out power in several southern states in February, the IRS extended the federal tax deadline for residents and business in Texas, Louisiana, and Oklahoma to June 15.

Extending the deadline for 2020 tax returns nationwide will allow for additional time to implement new tax laws authorized by the American Rescue Plan, Neal and Pascrell said, including tax forgiveness on unemployment income up to $10,200.

Tax professionals have also expressed concern about the April deadline. In a March 4 letter, American Institute of Certified Public Accountants Chair Christopher W. Hesse, on behalf of the organization with more than 431,000 members, said it didn’t “reflect the real-world hardship and challenges imposed on taxpayers and tax professionals,” and requested a June 15 due date for returns and payments.

This is a developing story.

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Michigan license number:   DM-0016282 Available to the public and licensed in Michigan.

Section 13(1)  When a licensee establishes a debt management plan for a debtor, the licensee may charge and receive an initial fee of $50.00

Section 13(2)  A licensee shall attempt to obtain consent to participate in a debt management plan from at least 51%, in number or dollar amount, of the debtor’s creditors within 90 days after establishing the debt management plan. If the required consent is not actually received by the licensee, the licensee shall provide notice to the debtor of the lack of required consent and the debtor may, at its option, close the account. If the debtor decides to close the account, any unexpended funds shall be returned to the debtor or disbursed as directed by the debtor.

Sec. 14. (1) A contract between a licensee and debtor shall include all of the following:

(a) Each creditor to which payments will be made and the amount owed each creditor. A licensee may rely on records of the debtor and other information available to it to determine the amount owed to a creditor.

(b) The total amount of the licensee’s charges.

(c) The beginning and termination dates of the contract.

(d) The principal amount and approximate interest charges of the debtor’s obligations to be paid under the debt management plan.

(e) The name and address of the licensee and of the debtor.

(f) Any other provisions or disclosures that the director determines are necessary for the protection of the debtor and the proper conduct of business by a licensee.

Sec. 18. (1) In addition to the fee described in section 13(1), a licensee may charge a reasonable fee for providing debt management services under a debt management plan. The fee under this subsection shall not exceed 15% of the amount of the debt to be liquidated during the express term of the plan.

(2) A licensee may offer a debtor the option to purchase credit reports or educational materials and products, and charge a fee to the debtor if the debtor elects to purchase any of those items from the licensee.  Fees charged under this subsection are not subject to the 15% limitation on fees described in subsection (1).

(3) Except for a cancellation described in subsection (4), in the event of cancellation of or default in the performance of the contract by the debtor before its successful completion, a licensee may collect $25.00 in addition to any fees and charges of the licensee previously received by the licensee. This $25.00 fee is not subject to the 15% limitation on fees and charges under subsection (1).

(4) A contract is in effect when it is signed by the licensee and the debtor and the debtor has made a payment of any amount to the licensee. The debtor has the right to cancel the contract until 12 midnight of the third business day after the first day the contract is in effect by delivering written notice of cancellation to the licensee. A cancellation described in this section is not subject to, and a licensee shall not collect, the fee described in subsection (3).

(5) If a debtor fails to make a payment of any amount to a licensee within 60 days after the date a payment is due under a contract, the licensee may, in its discretion, cancel the debt management contract if it determines that the plan is no longer suitable for the debtor, the debtor fails to affirmatively communicate to the licensee the debtor’s desire to continue the plan, or the creditors of the debtor refuse to continue accepting payments under the plan.

(6) A licensee shall not contract for, receive, or charge a debtor an amount greater than authorized by this act. A person that violates this subsection, except as the result of an inadvertent clerical or computer error, shall return to the debtor the amount of the payments received from or on behalf of the debtor and not distributed to creditors, and, as a penalty, an amount equal to the amount overcharged.

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