If You Haven't Filed Your Taxes Yet, You're Not Alone As July 15 Deadline Looms

The coronavirus pandemic prompted a delay in the April 15 tax deadline, but that reprieve for filing and paying taxes expires on July 15, and tax preparers say they are further behind than ever.

The Internal Revenue Service expects to receive 155.1 million individual returns for the 2019 tax year. In a typical year, 95% of individual returns, including requests for six-month extensions, are filed by late May, providing the government with 82% of total tax payments.

Anyone making more than $12,000 a year is required to file a return.

The IRS has not confirmed how many returns have been filed and the delay has encouraged taxpayers not only to delay preparing their returns but also paying up. In addition, the IRS eased enforcement of installment agreements for people who had not paid their taxes in full for previous years.

All this has put a strain on the nation’s checkbook. In 2019, the federal government collected more than $535 billion in revenue in April and $232 billion in May. In 2020, April collections dropped to $241 billion and May fell to $173.8 billion. Through the end of May, the government was nearly $1.9 trillion in the hole.

“I generally do between 1,100 and 1,150 personal tax returns. In an ordinary year, I have between 400 and 450 extensions. To date, we have completed and sent out 715 returns and I project that we will complete another 50 or so before the 15th,” Ira Dubin of Green Dubin & Co., a suburban Chicago certified public accounting firm, told International Business Times in an email.

Dubin claims that part of the problem was the CARES Act, which required his office to divert resources to helping clients navigate the rules for obtaining small business loans.

“The CPAs are still learning the tax changes, which are not all available on their software. Many tax professionals rely on this tax prep software so the emphasis has and will be on professionals with tax law expertise to help comb through the new law,” said Julio Gonzales, CEO and founder of Engineered Tax Services of West Palm Beach, Florida.

“The IRS is going to have to understand that CPA's are still working through tax returns. They need to either extend the deadline again or find some way to work with business owners and individuals who are facing trouble.”

Dubin said most of his clients are delaying paying up for 2019 – whether they’ve already filed their returns or not.

“In addition, the first and second estimates, due April 15 and June 15 for 2020 were also delayed to July 15. Ninety percent of my clients who pay estimated taxes are delaying paying those also to the 15th of July,” he said.

The delayed payments may be responsible for delays in refund payments. Dubin said clients who file their returns and receive their refunds electronically normally get their money in 10 business days but this year are waiting six weeks or more. The waiting time for a paper check is even longer.

The IRS is supposed to issue refund checks within 45 days of either the April 15 deadline or the date a return was filed, whichever is later. This year, the IRS said it would pay 5% interest for the second quarter and 3% for the third quarter. The rates are annual and compounded daily.