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In the wake of disasters & COVID-19, will the IRS be ready for the 2021 tax season?

The continuing COVID-19 chaos, plus an extended 2020 filing season for those coping with this year's natural disaster onslaught, could create more challenges in 2021 for taxpayers and the Internal Revenue Service. Are we — and the agency — ready for it?

Get ready woman yelling

2020, a year that many of us would just as soon forget, will end in just more than two months.

This federal tax filing season, however, will continue for folks who've endured some of the notable natural disasters that have helped make 2020 so terrible.

Last week, the Internal Revenue Service issued more disaster-related tax relief in connection with two more catastrophes.

First, more California residents who had extended the filing of their 2019 taxes were given, among other assistance, a new deadline of Jan. 15, 2021, for finishing that Form 1040.

Then came the filing date change for Louisianans who went through Hurricane Delta. Before this record-breaking 10th U.S. landfalling 'cane arrived, these taxpayers had planned to finish their 2019 taxes by Oct. 15. Now the folks in Acadia, Calcasieu, Cameron, Jefferson Davis and Vermilion parishes have until Feb. 16, 2021, to get their returns to the IRS.

Disaster Victims'
Revised 2019 Tax Return Filing Deadlines

  • Iowa derecho — extended returns due by Dec. 15, 2020
  • California wildfires (August) — extended returns due by Dec. 15, 2020
  • Louisiana areas hit by Hurricane Laura — extended returns due by Dec. 31, 2020
  • Oregon wildfires — extended returns due Jan. 15, 2021
  • Alabama areas hit by Hurricane Sally — extended returns due Jan. 15, 2021
  • California wildfires (September) — extended returns due Jan. 15, 2021
  • Louisiana areas hit by Delta — extended returns due Feb. 16, 2021

 

Plus, the ongoing health disaster: All these major natural disasters are on top of the challenges that all us taxpayers, and the IRS, have had to face this year due to the coronavirus pandemic.

The COVID-19 outbreak led to new tax breaks were created, other deadlines changed and although the chaotic 2020 filing season officially ended last week, we're still dealing with its aftermath.

And the 2021 tax year and filing season for our 2020 returns is just a little more than two months away.

Will you be ready? An even more critical question is whether the IRS, which is still dealing with its myriad new COVID-19 responsibilities, will be ready.

Tax season preparation concerns: That's what Democrats on the House Ways and Means Committee want to know. The tax-writing committee's chairman, Rep. Richard Neal of Massachusetts, and head of the panel's oversight subcommittee, Rep. Bill Pascrell, on Oct. 22 sent IRS Commissioner Chuck Rettig a letter asking about the agency's preparedness.

"Clearly, the current filing season has been long and challenging for the IRS due to the ongoing pandemic, and we are concerned about another filing season fast approaching," wrote Neal and Pascrell. "Millions of taxpayers still have not had their tax returns processed, and we continue to hear from constituents who now believe their returns are 'missing' and others who anxiously await needed refunds."

The two lawmakers also noted that current backlogs (not to mention extended extensions) of 2019 returns will mean the continuation of this filing season into 2021.

Specifically, the Ways and Means members want the answers to three questions:

  • Will the 2021 filing season begin on time next year?
  • On what date does the IRS expect to open the 2021 filing season?
  • Is the IRS prepared for the 2021 filing season? 

Already asked and sort of answered: Similar concerns were raised earlier this month during a hearing of the House Oversight and Reform's Subcommittee on Government Operations.

The hybrid session was led by subcommittee chairman Rep. Gerald Connolly (D-Virginia), who invited his fellow full Oversight Committee colleague Rep. Katie Porter (D-California) and the Ways and Means' Pascrell to participate.

During the Oct. 7 hearing, which was conducted on Capitol Hill but with most lawmakers taking part remotely, Rettig addressed his agency's 2021 filing season preparations, which he said had been underway for months.

"When one filing season ends, we are already well into preparations for the next in terms of identifying and planning for needed hiring, and for updates to forms and instructions, processing and programming," Rettig said. "For the upcoming filing season, we believe it will be more important than ever for taxpayers to take advantage of e-filing and our online and virtual services to help them with their taxes."

Inquiring tax minds want to know: The Congressional concerns about the 2021 filing season, COVID-19's continuing effects on it and exactly how the IRS plans to cope with it are why last week's Ways and Means letter and the earlier House hearings (and coverage of it) earn this weekend's multiple Saturday Shout Outs.

IRS Commissioner Chuck Rettig House Oversight 10-7 -2020 hearing_committee YouTube video

In addition to reading the tax-writers' letter, you can watch the Oversight hearing at either the committee's YouTube channel (that's a screen shot above) or C-SPAN's archived broadcast.

If you prefer reading instead of watching or listening, you can check out the full transcript provided by the online audio transcription and video caption service Rev.

And here's a bonus, whether you go the video or transcription route. Erin Collins, the new National Taxpayer Advocate, also testified at the hearing.

You also might find these items of interest:

 

Coronavirus Caveat & More Information
In 2020, we're all dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.

But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.

 

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