Top Democrats urge IRS to extend tax-filing deadline beyond April 15

Top House Democrats on Monday urged the Internal Revenue Service to extend the tax-filing deadline beyond the traditional April 15 deadline, arguing the agency needs additional time to sort through a backlog of returns.

House Ways and Means Committee Chair Richard Neal, D-Mass., and Oversight Subcommittee Chairman Bill Pascrell, D-N.J., said the IRS should delay the deadline because the coronavirus pandemic has imposed a "titanic strain on the agency and on taxpayers."

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“We stand in the midst of the most important tax filing season in recent memory, and taxpayers cannot get the help they need from the IRS," the lawmakers said in a joint statement. “Returns received by the IRS have fallen significantly behind last year’s numbers."

The Internal Revenue Service reported two weeks ago that the total dollar amount of tax refunds was down 59.2% through Feb. 19, exactly one week after the start of tax season. The agency has processed just $47.7 billion in tax refunds so far this year, compared with more than $117 billion during the year-ago period.

In the first eight days of the 2021 filing season, the IRS has issued about 2.072 million returns per day. During the first 26 days of the 2020 filing season, the IRS said it distributed 1.44 million refunds on average. But the agency is still working its way through 6.7 million returns from 2019 that have not been processed as of Jan. 30.

The IRS extended the deadline for filing and paying taxes last year from April 15, the customary date, to July 15, because of the pandemic, part of a broader relief effort intended to let individuals and businesses hold onto their cash for longer.

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"We want to remind the IRS that many Americans continue to face the same health and economic challenges that necessitated an extension last year. Facing enormous strain and anxiety, taxpayers need flexibility now. We demand that the IRS announce an extension as soon as possible.”

An agency official said in February there are no plans to extend the deadline beyond April 15, even though the IRS delayed the start date for accepting returns to Feb. 12, when it usually starts doing so in late January," Neal and Pascrell said. "Taxpayers can request a six-month extension to file their returns, although any money owed needs to be paid to avoid a penalty."

The IRS has urged Americans to file their taxes electronically this year as the agency tries to sort through nearly 7 million unprocessed paper returns from last year. The agency received about 16 million paper returns last year; as of Dec. 25, the agency said it still had about 6.9 million individuals returns in the "processing pipeline" — or about 40%.

The delay means that people who claim Earned Income Tax Credit or Additional Child Tax Credit won't receive their refunds until the beginning of March, so long as they file electronically with direct deposits and there are no issues with their tax returns, the IRS said.

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The agency said it expects nine out of 10 taxpayers to receive their refund within 21 days of filing electronically.