House Democrats propose to extend tax-filing deadline 5 weeks

A pair of House Democrats has introduced a bill to extend the tax-filing deadline until May 20 to give taxpayers more time to file their taxes after the partial government shutdown, amid lingering uncertainty over the extensive changes in the tax code and tax forms in the wake of the Tax Cuts and Jobs Act.

Reps. Sean Casten, D-Ill., and Lauren Underwood, D-Ill., introduced the Taxpayer Extension Act on Wednesday to give taxpayers an extra five weeks to file their individual tax returns for 2018.

They noted that during the 35-day shutdown, the IRS sent close to 90 percent of its workforce home without pay. The Taxpayer Extension Act would provide an extension of the tax return due date for five weeks, from April 15, 2019 to May 20, 2019, for individual income tax returns for 2018, to provide additional time equal to the government shutdown.

Daniel Acker/Bloomberg

“When President Trump shutdown the government for five weeks, Americans were left high and dry,” Casten said in a statement. “When tax filers — many hit with sticker shock thanks to the Trump tax changes — called the customer assistance line, their questions went unanswered. When they visited the walk-in taxpayer assistance centers, they found locked doors. This is unacceptable. I am proud to introduce a bill that would give individual tax filers more time to prepare their return.”

They pointed out that many taxpayers in Illinois are running into unexpectedly high tax bills due to the $10,000 cap on the state and local tax deduction in the Tax Cuts and Jobs Act.

“Because of the Republican tax law enacted last year, this tax season is going to be hard for many Illinoisans—particularly those in the 14th district who are carrying a disproportionately high tax burden due to a new limit state and local tax deduction,” Underwood stated. “On top of that, just before many families went to file their taxes, there was a senseless government shutdown that left tax filers’ calls unanswered, doors for assistance centers locked, and 90 percent of the IRS workforce home without pay. This is common sense legislation that will help give taxpayers extra time to ask questions and file their taxes this year.”

They contend that the extra five weeks would help ensure taxpayers have the online tools they need to file their returns electronically. The extension would help to avoid computer systems breakdowns like the one the IRS encountered last April. Last year, they noted, the IRS issued an emergency one-day, penalty-free extension for tax filers after suffering an all-day computer breakdown that kept taxpayers from filing their returns electronically on the day 2017 payments were due. They believe the legislation would help alleviate the extra burden on the IRS’s filing systems.

The National Taxpayers Union Foundation released an analysis Thursday also calling on Congress to consider extending the tax-filing deadline this year. The NTUF pointed to the shaky start to the tax filing season, which began only a few days after the partial government shutdown ended. The group noted that the timing of the shutdown combined with its historic 35-day length left the IRS scrambling to work through a significant backlog of preparations for a busy filing season. Despite the IRS’s efforts, the shutdown left taxpayers and tax practitioners without adequate support to determine legal obligations, as service centers went unstaffed and many forms were not yet finalized.

“The newly-passed TCJA was already poised to shake up tax filing, but the shutdown constituted an earthquake for an agency with an unstable foundation to begin with,” said the study’s authors, Andrew Moylan and Andrew Wilford. “By taking swift and decisive action, Congress and the IRS can help to ease the time crunch that threatens to harm taxpayers and further disrupt IRS operations.”

The study draws from data from the IRS’s Taxpayer Advocate Service. National Taxpayer Advocate Nina Olson highlighted the lingering effects of the shutdown on the IRS in her annual report to Congress, noting the extent of service disruptions in the IRS’s taxpayer support operations (see Taxpayer Advocate sees continuing impact on IRS from shutdown). The study also points to lesser-known issues, like interest accruing on certain pending U.S. Tax Court matters, to highlight the need for Congress to work with the IRS to provide for a comprehensive extension of tax filing deadlines.

The NTUF recently also studied the ways the shutdown has had an impact on tax refunds and left taxpayers with misinformation regarding how the Tax Cuts and Jobs Act has made a difference in tax refunds and tax liability.


Michael Cohn