Maryland CPAs are upset in the wake of what is being called the worst tax season in history.
It started with the fiscal cliff and the resulting last-minute American Taxpayer Relief Act of 2013. (Don’t you just love those titles?) It ended with a deluge of last-minute e-filings that swamped the IRS and state tax systems, resulting in rejections, late notices of acceptance, and general chaos. Several members reported excuses from the IRS about sequestration cuts and poor or non-existent service.
Tax season, normally 90 days long, was shortened this year to 75 days on average and in some cases as few as 38 days (for instance, with rental property tax forms) due to the last-minute enactment of the American Taxpayer Relief Act of 2013 as a result of the fiscal cliff debates.
This resulted in complications and unintended consequences in the following areas:
- Tax software companies had to rush to implement last-minute tax changes, which resulted in several well-documented failures and errors affecting CPA tax preparers.
- Compressed tax season resulted in much heavier volume of last minute e-filings, which overwhelmed IRS and Maryland (and other states’s) tax systems.
- Increased stress and anxiety was felt by taxpayers who were dealing with the last-minute changes and uncertainty.
Suggested changes from the MACPA tax group include the following:
- Standardize 1099s: New requirements for filing make these critical documents, and standardizing will assist tax preparers in filing them correctly and reduce the time and costs to file.
- Set a deadline for submission of corrected 1099s: Changes to 1099 forms (especially the 1099-B from brokerages, which were changed in 2012) are creating a huge workload for CPA tax preparers who must rework the entire tax return for taxpayers when these forms are submitted. Many of these “corrected” forms were still coming in as late as April.
- Standardize W-2 forms: See 1099s above.
- In the event of last-minute legislative tax changes, extend the deadlines for filing so the IRS, tax software and CPAs have additional time needed to understand and file tax returns.
- Waive penalties for late filing for 2012 and in the future if tax filing compression occurs.
How did we deal with it?
We started with MACPA Groups. The wisdom of the crowd was evident in the hundreds of messages in and out of our tax group (and listserv) during this tax season. MACPA tax pros were able to ask and get answers from some of the best tax minds anywhere. For the MACPA, it provides a real-time feedback loop about the biggest issues facing our tax professionals.
Tell us your wishes to prevent 2013 from being even worse by commenting below.
- CCH Guide to American Taxpayer Relief Act of 2012
- USA Today: April 15 deadline ends tumultous tax season
- CPA Trendlines: 12 reasons to love tax season (really)
- CPA Trendlines: Tax pros turn negative on busy season