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Keeping up to Date with Tax Changes During the Pandemic

Posted on in Business License Defense IDFPR

Chicago Business License Defense LawyerCPAs have not been untouched by the pandemic; their industry, too, faces specific challenges directly pertaining to the pandemic. These challenges come in the form of different deadlines, IRS closures, various tax credits, stimulus payments, and amendments to law during tax season.

The IRS closed in March of 2020 due to the threat of the pandemic, and as of Summer 2021, was still in the process of slowly reopening facilities. This closure meant that employees were working from home, or on furlough, while tax returns and other tax-related communications rolled into the temporarily closed IRS facility. Citizens who mailed in their tax returns or estimated tax payments during this period of time are most likely still waiting for the process to be fulfilled as the IRS had millions of backlogged mail. Unfortunately for their clients and their own peace of mind, CPAs could do nothing to rectify this situation. It was certainly equally stressful for CPAs to not receive their clients’ filed tax returns, estimated tax payments, and other related matters. General communication with the IRS was/is also virtually impossible, which makes it even more difficult to determine the status of anything. These issues may take months, if not years, to fully unravel and rectify.

Despite the pandemic and the closure of the IRS, there were many federally implemented changes to either tax deadlines, tax law, or the creation of credits and payments that would eventually affect the accounting industry. While it is not necessarily uncommon for the government to move the tax filing deadline, the circumstances for this movement were unique, and the deadline was extended further out than normally done. Deadlines for tax extension payments and for retirement contributions were also altered. Licensed accounting professionals were expected to keep up with these random, sudden changes as they occurred to keep their clients informed, even when the occurrences weren’t clear or were unprecedented with no prior examples for reference.

Many individuals also received stimulus payments for pandemic-related relief. Not only are these payments reported on tax returns, they were contingent on the individual’s income reported on their most recently filed tax return. This did create a surge of individuals filing their returns to qualify for the stimulus payment, or even extending their tax return and not filing for the purpose of receiving this payment. Similarly, for individuals who were on unemployment in the year 2020, the government passed a measure that disqualified the first 10,200 per taxpayer as taxable income. Many individuals had already filed their returns at this point and paid tax on their unemployment income. CPAs had to scramble to determine the best course of action, namely whether to amend these filed tax returns.

Williams & Nickl has represented thousands of licensed professionals and their licensed business entities who face issues with IDFPR. If you find yourself in such a situation, Williams & Nickl can provide the help you need.

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