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Tax deadline may expand for e-filers
WASHINGTON -- Millions of taxpayers who file and pay their taxes electronically would get a two-week extension of the traditional April 15 deadline under a bill the House passed Thursday.
The new April 30 deadline for electronic filers is part of legislation designed to make the Internal Revenue Service a little friendlier to the average taxpayer. Many recommendations come from the taxpayer's advocate service, an office that helps people navigate the IRS and solve their tax disputes.
The House approved the bill 252-170 despite objections by some lawmakers that different deadlines for different filers would cause confusion. Officials hope to double the current rate of electronic filing and believe the bill would give an incentive. It must be passed by the Senate before it can go to the president and become law.
The new deadline would not apply to taxpayers who file in the old fashioned way, by filling out their returns by hand and mailing them in.
Rep. Rob Portman, R-Ohio, said lawmakers decided to "risk a little confusion" about the deadline in order to increase electronic filing, which should mean fewer errors, both by filers and by IRS employees transferring paper returns into electronic records.
Some worry that two deadlines will confuse taxpayers. Democrats dropped the idea from their alternative version of the bill, which the House defeated 226-196. "You don't need any more confusion in the tax filing that you have already today," said Rep. Jim McDermott, D-Wash.
Taxpayers can file electronically through a professional tax preparer, or by purchasing computer software to use at home.
To bolster the confidentiality of a taxpayer's information, the bill allows the IRS to punish or fire employees for browsing returns without reason. It also calls for onsite reviews of contractors who have access to federal tax return information.
The bill also would:
Increase the money Congress can appropriate for low-income taxpayer clinics to $9 million next year and then by $3 million in each of the next two years.
Allow taxpayers found guilty of minor negligence when preparing and filing their returns to get a one-time waiver of penalties and interest. The provision is designed to limit unreasonable charges caused by honest mistakes and confusion, not systematic or repeated tax fraud.
Permit people who cannot pay their entire tax bills to enter an installment agreement to pay less than the full amount. The bill asks the IRS to study the cost of imposing liens and levies to collect unpaid taxes. Lawmakers want to know whether the cost of imposing the penalties outweighs money they could collect.
Take away the tax-exempt status of organizations found to have connections to terrorism.