Posted by Daniel P Vigilante CPA and Profit Consultants

Recent e-filing Issues That Have Occurred and How They Have Affected Taxpayers.

Recent e-filing Issues That Have Occurred and How They Have Affected Taxpayers.

On September 1, 2020, the IRS updated its procedures regarding the application of IRC Section 7502, timely remittance treated as timely filing, and payment of electronically arched returns in the Internal Revenue Manual (IRM). The update indicates that returns stored electronically will be considered to have been sent on time if the return: was sent through an authorized electronic return sender and with a timely email stamp; and received from the IRS in a usable manner.


However, on September 15, 2020, the IRS was aware that an unexpected outage in systematic tax preparation software prevented some taxpayers from filing their returns electronically by the September 15, 2020 deadline.


The IRS encouraged all taxpayers who couldn't file the process on time to request an extension if they qualify. A taxpayer who is not entitled to an extension should do 

The IRS announced that for tax returns due September 15 affected by an e-filing software malfunction, the service would treat the return and any elections made with that return as filed on time if the taxpayer is successful.

 

Due to technical issues with the CCH Electronic Spinning System, some users could not file their returns to the Electronic-File Queue for much of September 15. But, the issue was resolved on September 16.


The September 15 deadline applies to various federal tax returns, including Form 1120-S, US Tax Return for Company S, for calendar-year S Corps that have requested a six-month extension, and Form 1065, US Return of Partnership Income, for associations that have requested a six-month extension.


Due to the outage experienced by CCH on its online systems that began on the afternoon of October 15, 2020, and continued through the night. Public accountants who used their systems were unable to file their last day tax returns to complete extended tax returns promptly.

Failure to comply with on-time declarations raises more than concerns about late payment penalties; some choices are only valid if they are made with a timely declaration. As a result, many CPAs were very concerned about the impact of this system failure on their clients.


The IRS took note of the situation and offered the following relief:

The IRS will consider that a return was filed on time and any elections made with that return (for example, Form 3115, Request for Change in Accounting Policy) that were affected by the program interruption of external taxation on September 15. 2020, if the taxpayer is successful, has completed the return and the elections that were submitted with that return by September 17, 2020.


Some may wonder why the IRS finally announced the expiration date for the return filed a week later. After all, is it fair to ask tax professionals to take action before the IRS advises on the exemption? The agency's insistence in the following paragraph makes it clear that when such situations arise, taxpayers and their advisers should try to correct the issues as quickly as possible and not wait for a response from the agency to find out what will happen time limit for action:

The IRS encourages all taxpayers who cannot promptly file the process to request an extension if they qualify. A taxpayer who is not entitled to an extension should do everything possible to file the return on or as soon as possible after the due date.


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