survey: tax season swings into the red

efiilings lag by 5 million as practitioners call it a “nightmare.”

surviving busy season 2021:
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by beth bellor
卡塔尔世界杯常规比赛时间 research

the irs is narrowing the gap between this season and 2020, still behind in almost every area but with more deficits now in the single digits. that’s what passes for good news these days.

more: another tax season from hell? | pros process 44% of tax e-filings | tax professionals report tough slogging | busy season 2021 gets off to weak start
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meanwhile, tax practitioners are reporting further deteriorations in their busy season, with 35 percent now terming is “much worse” than the year-ago, up about 11 points from the earlier soundings on the 卡塔尔世界杯常规比赛时间 busy season barometer. join the survey. get the results.

on march 17, the treasury department and irs announced the 2020 individual federal income tax filing due date would be automatically extended from april 15 to may 17. since then, some 25 states and localities – but not all – announced similar extensions.

as of march 19, the latest data available, the service had received 76.1 million individual income tax returns, down 9.6 percent from the same period last year, when the season began 18 days earlier. it had processed 67.7 million returns, down 16.6 percent, for a current processing rate of 89 percent.

e-filing

electronic filings totaled 72.7 million, down 8.7 percent. by that tally, 95.6 percent of returns have come in electronically.

tax professionals submitted 34.6 million efiled returns, down 15.7 percent. do-it-yourselfers are nearly at 2020’s pace with 38.2 million e-filings, down 1.3 percent.

the pros are making steady gains in market share, now at 47.5 percent of all e-filings.

website visits

visits to irs.gov were the only positive in this weekly report, up 138.1 percent at 879 billion.

refunds

the irs has issued 49.7 million total refunds, down 23.6 percent, in the total amount of $145.6 billion, down 23.8 percent. the average refund of $2,929 was down 0.2 percent.

there were 47.1 million total direct deposit refunds, down 15.3 percent, in the total amount of $140.4 billion, down 18 percent. with an average of $2,982, direct deposit refunds were down 3.2 percent.

shock and awe

on the front lines, tax practitioners are meeting the challenges with something akin to shock and awe.

“the extension to may for filing and payments is a big help,” says james f. hundshamer, a cpa in glendora, calif. but, he adds, “it does not go far enough. the first estimate payment is still due 4-15-21. this still means obtaining information and calculating the amount due before 4-15 for those who typically pay 100% of the prior year’s tax to avoid penalty. without this change, we are still in full gear.”

in woodland hills, calif., cpa david newman calls the new may 17 due date “a major nightmare.” he sees “no way to get all of the work even closely done by then, and also a major problem getting 2021 quarterly estimates out by 4/15/21.”

the alphabet soup that makes up a normal tax practice has turned bitter for cpa grace m. lopez-williams, who runs a bi-lingual english-spanish practice in norcross, ga., with a strong clientele of mexican emigres. “pp, app, erc, grants, and taxes!” she says. “too much!”

in ogden, utah, enrolled agent jacques behar, says last year’s tough season will be “nothing!” compared to this year’s. “this season is going to be hell right up until midnight on 10/15/21 and beyond because of amended tax returns that i will then need to file.”

the original tax doctor in des moines, iowa, tony mauro reports his “revenue from tax is down about 25% thus far. also, the number of returns is down.”

cpa cheryl a. raboin in newport, vermont, has a list of problems: “ppp. tax changes. waiting for software. need to amend returns in the middle of tax season because of the retroactive tax law change.” she’s “very disappointed with the may 15th deadline change. it is just for show! without extending estimates, it is a worthless extension and a huge blow to tax preparers. the irs and the rest of the government are given a pass on being late because of covid. this extension amounts to showing no respect for taxpayers or preparers!”

roger l. mills at adf accounting in kalamazoo, mich., agrees, citing “severe legislation on two occasions, with retroactive changes signed into law in the middle of tax season.”

at jones, jones, davis, and assoc. cpas in augusta, ga., they’re getting hit from all sides. thomas w. jones, cpa/abv, pfs, cfp, cva, and managing director of tax, estate planning, and business valuations, says some “professional staff are sick with covid.” then there’s “ppp #1, ppp#2, ppp loan forgiveness, employee retention credit, the irs sending out erroneous levy notices since they have not opened the mail sent in october 2020 and cashed the check, and the american rescue plan 2020 tax provisions mean we have to re-do returns for unemployment benefits.”

 

posted on march 28, 2021