If you hadn’t heard by now, Congress passed a temporary extenders bill Dec. 16, which was signed into law by the President today. The Tax Increase Prevention Act of 2014 retroactively extends for one year (to Dec. 31, 2014) all the provisions that expired last year. So yes, that means those very same provisions will expire in just a few weeks, leaving the question of longer term extensions to the new Congress.
Immediately following the election, there was speculation that Congress may not take action before the end of year. However, in recent days Congress made considerable progress to the point where we stopped asking ‘if’ and focused more on “what, when and for how long”.
There has been extensive coverage in the press on the passage of this legislation, including articles in the Journal of Accountancy, Washington Post, and Reuters. If you are looking for a summary of the provisions impacted by the legislation, we suggest you check out CCH’s Special Report “Congress Passes Extenders Package, ABLE Act; Cuts IRS Budget” available online for free.
The larger question is what impact this will have on filing season. The Tax Girl blog (written by Kelly Phillips Erb, Forbes) suggested that this bill will delay the start of filing season, even though it merely extended existing provisions and did not result in significant forms delays or other operations changes to IRS. She observed, “The IRS Commissioner has not yet announced a start date to the 2015 season: I would expect a late January to early February date.” Many were already anticipating another challenging filing season, perhaps the most difficult season the profession has seen in many years.
Compounding the problem is that a separate bill passed by Congress on Dec. 13 cut the IRS budget by nearly $346 million. Last September, the AICPA recommended Congress fully fund the IRS, stating that “we believe that proper funding of the IRS’s budget is essential to the IRS’s ability to carry out its mission,” which includes providing assistance to taxpayers and tax practitioners. These additional cuts to the IRS budget could mean even longer wait times when calling IRS, additional delays in responses to inquiries and issuance of administrative guidance, as well as a further slowdown in the release and update of tax forms and instructions.
This serves as a great reminder to our members of the need to plan ahead to anticipate the impact these types of slowdowns could have on their practice. Consider planning your client communications in advance to overcome messages in the mainstream press that clients may hear about your workload or availability. Do you have a defined procedure and process for managing extensions, since you may be filing more this year than ever before? Now, more than ever before, CPAs need to plan for and adapt processes, workflow and office procedures to ensure a smooth busy season.
