The American Institute of CPAs (AICPA) has endorsed bipartisan legislation introduced by Representatives Judy Chu (D-CA) and Mike Carey (R-OH) to simplify the tax filing extension process. The Simplify Automatic Filing Extensions (SAFE) Act of 2023 would assist the Internal Revenue Service (IRS) with receiving extensions earlier in the year, providing taxpayers, CPAs and the IRS with a streamlined process and reducing the need for many penalty abatement requests.

The IRS frequently faces challenges in administering the tax filing season, which includes the: (1) late enactment of tax legislation; (2) delays in the release of tax forms that are needed before tax returns can be finished; (3) anticipating and planning for resolution of expired provisions; (4) software interruptions; and (5) staffing issues.

In addition, taxpayers and their preparers must often obtain records from third parties to properly determine their tax liability. It is often impossible to collect the information needed for a complete and accurate return by the original due date. To cope with these obstacles, taxpayers and tax professionals often request extensions of time to file tax returns. These extensions allow taxpayers an additional six months – from April 15 to October 15 – to prepare their tax return. Penalties may apply if certain amounts are not paid with the extension request and first quarter estimated payment by April 15.