U.S. Rep. Darin LaHood (R-IL) on Feb. 6 introduced a bipartisan bill designed to simplify the tax filing and payment processes for families and small businesses.
The Tax Administration Simplification Act, H.R. 1075, incorporates three recommendations from the National Taxpayer Advocate’s annual “Purple Book.” It also builds off previous legislation aimed at streamlining the tax filing process.
“Part of our work in strengthening the tax code is to find ways to improve tax administration and filing systems being used by millions of Americans,” LaHood said. “I am proud to introduce the bipartisan Tax Administration Simplification Act, which incorporates commonsense reforms to better streamline the tax filing process for American families, workers, and small businesses.”
The bill makes the following changes to the tax code:
- Applies the “mailbox rule” to documents and payments electronically submitted to the IRS.
- Under current law, if a taxpayer submits certain payments or documents to the IRS electronically on a given due date, but they are not processed until the next day, they would be considered late. This bill would ensure that documents and payments submitted electronically are considered made on the date submitted, even if they are not received or reviewed until a later date.
- Extends the time for making S Corporation elections. Under current law, many small business owners miss the deadline for electing to be treated as an S Corporation because the election deadline generally precedes the filing deadline for the corporation’s first income tax return. The bill would allow taxpayers to elect “S” status on their first timely-filed income tax return.
- Revises estimated income tax payment deadlines. Under current law, estimated tax payment deadlines are spaced at uneven intervals throughout the year. While these payments are often referred to as “quarterly payments,” they are currently spaced at three-month, two-month, three-month, and four-month intervals (April 15, June 15, September 15, and January 15). The Tax Administration Simplification Act would change the estimated tax payment deadlines to actually fall on a quarterly basis – April 15, July 15, October 15, and January 15 – making it easier for taxpayers to calculate their net income.
The lead original cosponsor of the bill is U.S. Rep. Suzan DelBene (D-WA).
“Taxpayers should have one clear deadline to file documents and make required payments. The IRS should not treat taxpayers who choose to file electronically differently than those who file by mail. This bill would ensure the same standard to all Americans regardless of how they file,” DelBene said.