A tax expert said that a recent notice of Internal Revenue Service ( IRS ) to millions of taxpayers that they must delay filing their tax returns is unprecedented.
On Feb. 10, the IRS issued new guidance on special payments made by 21 states last year. That came about a week after the agency told taxpayers it was on hold to provide additional guidance on those payments and whether they are subject to federal taxes.
"THE IRS has determined that in the interest of good tax administration and other factors, taxpayers in many states will not be required to report these payments on their 2022 tax returns," the IRS said in its latest update. "The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and the Treasury Department worked to resolve this unique and complex situation," it said.
But for a tax expert, the announcement earlier in February of a filing delay is highly unusual.
“I know when we had the American Rescue Plan in 2021 and we got this late guidance on the unemployment exemption, but I've been doing taxes for 32 years, I don't know that the IRS said to wait for the filing. ” said Tom O'Saben, director of Tax Content and Government Relations with the National Association of Tax Professionals, at The Center Square.
O'Saben added that he cannot recall a similar instance of the IRS making such a request. "It's almost unprecedented," he said.
In an earlier news release, the IRS said it is recommending that people who have already filed their tax returns do not file an amendment. O'Saben said he agrees with the agency's assessment.
"For those who have already submitted their statements, please do nothing," added Tom O'Saben. "We think that for more than 90 percent of the population, it's probably not an event."
"The impact of the delay in providing timely information and guidance is difficult to overstate," the Taxpayer Advocate Service (TAS), a federal agency of the IRS, wrote on its website. "Giving taxpayers the choice between waiting to file their returns and getting their returns or filing returns now that the IRS may later determine are inaccurate is not acceptable."
