TAX ALERT – Adding To or Avoiding the Log Jam

By Denise Felber, CPA, Tax Partner

In an article published recently on our website, we provided a link to a notice from the IRS.  They are delayed in processing returns and correspondence for the 2020 filing season (2019 tax returns) which was extended from April 15, 2020 to July 15, 2020.  The delay was a combination of factors:

  • Last year, COVID-19 restrictions slowed everything including tax filings.
  • IRS agents have limited time in the office and service centers.
  • Returns were filed later than usual and many of them have not been processed.
  • Those delays resulted in the IRS computer generating massive numbers of notices for missing payments and returns.
  • Responses to the notices were then generated, adding to the number of items waiting to be processed. The log jam keeps building.

Due to the recent nasty weather, the IRS has graciously extended the filing and payment date for many items due from early February to June 14.  For Oklahoma and Texas residents and businesses the due date for the following is June 15:

  • Income tax filings (and payments) for calendar year businesses, individuals and tax-exempt entities
  • IRA contributions
  • Estate and gift returns
  • Extension forms and payments
  • 1st quarter income tax payments due April 15
  • 1st quarter excise and payroll taxes
  • Adoption of or change in accounting methods or period (Form 1128 and Form 3115)
  • Election to forgo loss carrybacks
  • Like kind exchanges
  • Rollover of retirement funds
  • S elections
  • Asset purchase election under IRC 338
  • Trust distributions (65 day rule)

For more information, you can visit the IRS website for the Oklahoma and Texas announcements or a complete listing of items contained in Rev Proc 2018-58.

Oklahoma income tax forms will also be extended, but guidance has not been provided for other Oklahoma filings.  For taxpayers filing in multiple states, the extension of the Federal returns does not automatically extend state returns.

For those with broken pipes and lack of electricity, the delay is helpful.  Based upon the volume of information dropped at our office, those trapped at home with electricity and water were very productive in generating tax information.   We will continue to produce your returns in a timely manner.  Avoiding the log jam is our goal for you and your returns.