Bipartisan legislation recently introduced in the U.S. Senate would streamline tax filing and payment for individuals and small businesses.
The Tax Administration Simplification Act would do three things:
The bill would standardize estimated tax deadlines by creating evenly spaced quarterly deadlines. Currently required payments are due at inconsistent intervals throughout the year.
The bill would simplify S-Corp elections for small businesses by allowing business owners to make an S-Corp election on their first timely filed tax return. Currently, the election deadline for S-Corps precedes the deadline for filing their first income tax return.
The bill would protect taxpayers from penalties caused by Internal Revenue Service (IRS) delays in electronic filing by extending the existing “mailbox rule” to apply to electronically submitted documents. Currently, documents can be considered late unless submitted physically even if they have been submitted electronically by the due date.
“Taxpayers shouldn’t be penalized when the IRS is delayed in processing their tax returns even though they submitted them on time,” U.S. Sen. Marsha Blackburn (R-TN), who co-introduced the bill, said. “Our Tax Administration Simplification Act would shield taxpayers from unfair penalties, streamline tax filing, and provide more flexibility for small businesses.”
U.S. Sen. Catherine Cortez Masto (D-NV) cosponsored the bill.