coronavirus crushes tax prep.
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by beth bellor
slammed by the covid-19 crisis, tax season 2020 has gone off the rails.
tax return filing activity is trending down, and who can blame filers? with an automatic three-month extension, those who owe taxes have no incentive to file anytime soon. and practitioners are consumed with protecting their firms and rescuing their clients.
more: tax pros fall behind 6.2% in returns filed | tax pros trail by 908,000 returns | tax pro irs filings lag by 532,000 | tax pro e-filings lag by 512,000 returns | tax pros kick into high gear | slow start for tax pro e-filing | data points down as tax season opens | the fight for new tax clients
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that may be impacting numbers for e-filings by tax professionals, which are down in double digits. perhaps those whose dealings are complex enough to need assistance are seeking appointments in june now.
as of the week ending april 3, the latest data available, the internal revenue service had received 97.4 million individual income tax returns, down 5.9 percent from the same period in 2019. it had processed 92.5 million returns, down 8 percent.
the agency had processed 95 percent of returns, down from the previous week’s 96 percent.
e-filing receipts
e-filings totaled 91.5 million, down 5.6 percent. tax professionals handled 47.7 million of those returns, down 11.5 percent, while self-preparers turned in 43.8 million, up 3 percent.
professionals kept 52 percent of the e-filing market, even with the previous week’s pace.
website visits
visits to irs.gov were up 14.8 percent at 432.4 million.
refunds
refunds numbered 74.1 million, down 5 percent, in the total amount of $213.1 billion, down 3.5 percent. average refunds were up 1.6 percent at $2,878.
direct deposit refunds numbered 62 million, down 10.2 percent, in the total amount of $187.9 billion, down 8.2 percent. average direct deposit refunds were up 2.3 percent at $3,030.
5 responses to “the tax season 2020 dumpster fire”
karen schwimmer cpa
i also got totally overloaded trying to help with eidl and ppp loans and so far results are underwhelming. although most clients filed early, lenders were overloaded and few were fully processed before funds dried up. i’m hoping they will receive help when additional funding becomes available. i’m disgusted with our government on the implementation and use of these funds. very little seems to be reaching the small businesses that need it the most and the process and options made it very challenging!
tax season is down, but i continue to file returns and know that most will provide information and file by 7-15. i have gotten some new clients too because many preparers i know shut down on 4-15 or even earlier. fired one who was bad about paying. though i did not grow as expected this season, overall i’m feeling fairly positive about future.
jennifer cantrell
assisting clients with the government programs has become a priority. and while most cpas have enough integrity not to currently charge clients who need assistance with these things it has been extremely frustrating for the government to have cut us off at the knees from getting paid to do some of the work. we all know the financial professionals in this country – the cpas who work with small business-are the ones who keep the small businesses going. without our expertise many of them would’ve failed long ago. so if the government really wants to keep the economy going, why are we not allowed to assist the clients and get paid for it later when things turn around? another example of congress not understanding small business at all!
mark knighon
i have seen the same thing but i think it is a delay by clients who know they owe tax and are just using ” free money ” and a lot of people just staying home out of fear and rightly so i have been trying to get up to speed on these state and federal government “virus loans” while still getting returns out . i have not seen a lot of $$ going to the smaller firms yet i wonder how these is going to go ? unemployment filing in md has blown up the system . i hope they get it done quick or we may have troops in the streets in the less affluent areas . might come down to unemployment clerks writing checks and total loss of internal controls on this.
john mckee
my 1040 clients with refunds have put significant pressure to get their returns filled immediately; and, those who owe, have stopped all processing.
this has cut my projected billing income for 1040 tax preparations services by 60%.
my business (1065 & 11020-s) clients whose returns had been completed over a month ago, are now avoiding any communications regarding payment. this has further cut my tax preparation gross income by 25%. this has shown me which clients are lacking enough in honesty as to make the decision clear for me to terminate my services after this tax season. non-payment is one thing; hiding and refusing to return my calls regarding payment, for completed returns, is not acceptable.
my “good” (i.e., those who paid for 2019 tax preparation) have been pleading for free assistance in applying for various federal and state covid rescue programs. of course they have no income either for the foreseeable future. i am helping them as much as possible.
in summary projected regular tax season cash flow has decreased by 85%; and, i am gong to terminate services for 50% of my existing business clients due to their proven lack of integrity during this cataclysmic downturn.
in recent cpa local and state association meetings (online), my experience as described above, are common to all of those attendees.
michael
for the past three weeks, i have filed about half the returns that i normally would and have been slammed with rescuing clients, much of it done for free. i am sure i am not alone in that boat.