Obamacare Delays Should Delay Tax Day Too: April 15? How About August

Deadlines are part of government and our system of laws. We’re used to meeting them, including the dreaded April 15 tax day. Yet the repeated delays in implementing Obamacare have become the new normal. So far, according to Politico, we’ve had these:

  • Nov. 15, 2012: Exchange deadline delayed. The Department of Health and Human Services gave states an extra month to decide whether they would set up their own health insurance exchanges — a decision it announced just one day before the original deadline.
  • July 2, 2013: Employer mandate delayed. The administration declared that it wouldn’t enforce the fines in 2014 for businesses with more than 50 full-time workers who don’t offer health coverage. The fines were pushed back to 2015.
  • Nov. 21, 2013: Open enrollment delayed for 2015. The administration pushed back next year’s enrollment season by a month.
  • Nov. 27, 2013: Small Business Health Options Program (known as SHOP) delayed. Online enrollment for the federal health insurance exchanges for small businesses was delayed.
  • Dec. 12, 2013: Enrollment deadline extended. Customers on the federal enrollment website were given nearly two more weeks to sign up for coverage effective Jan. 1.
  • Dec. 24, 2013: Enrollment deadline extended. In a message on HealthCare.gov, customers were told they could get help finishing their Jan. 1 applications if they were already in line on Dec. 24.
  • Jan. 14, 2013: High-risk pools extended. The high-risk insurance pools, which originally had been slated to close Jan. 1, had already been extended once.
  • Feb. 10, 2013: Employer mandate delayed. This time, businesses with between 50 and 100 workers were given until 2016 to offer coverage, and the mandate will be phased in for employers with more than 100 workers.
  • Mar. 14, 2013: High-risk pools extended. The special, temporary coverage for people with serious pre-existing conditions — which was supposed to last only until the health insurance exchanges were in place — was extended a third time for another month.
  • Mar. 25, 2013: Final enrollment deadline extended. The March 31 deadline — the end of enrollment for 2014 — will be loosened for people with special sign-up circumstances.

Many have questioned the legal authority for these delays. The latest delay will extend the enrollment deadline by two to three weeks for three dozen states. With this delay and so many others, isn’t it reasonable to think that taxpayers too deserve a delay in that merciless April 15 tax day?

English: President Barack Obama, Vice Presiden...

While we’re at it, let’s not just get a filing deadline delay, but a payment delay too. The latter seems only fair. After all, you can already get an extension to file your taxes from April 15. You may need time to consider proper reporting, get professional advice, etc. There’s no shame in getting an extension. Millions are processed every year.

The extension used to be an automatic four months, with two more thereafter if you had a good reason. Then, the IRS dropped the reason requirement and the two-step process. Now automatic extensions are six months, from April 15 to October 15. Who couldn’t use the extra time?

But that extension is just to file your return, not to pay. Your payment is still due April 15. It would sure be nice to have an extension of that! Yet despite the repeated extensions in the implementation of the Affordable Care Act, it seems awfully unlikely that Congress, the IRS or the White House will extend the due date for your tax payment.

That means you should make your payment, get your extension, and use the time wisely to make your return accurate and complete. You may be waiting for Forms K-1, gathering documents, etc. If there are debatable points on your return, get some professional advice. It is better to go on extension and be thorough than to file rashly.

To extend, you can mail a Form 4868, ask your return preparer, use TurboTax or other commercial software, or do it yourself electronically. Go to IRS.gov and click: Application for Automatic Extension of Time To File U.S. Individual. For more IRS guidance, see IRS Tax Topic 304 Extensions of Time to File Your Tax Return.

Does going on extension subject you to a higher IRS audit risk? Probably not. Some people claim that going on extension increases audit risk. Others say that going on extension actually decreases it. Neither can be proven. There are many opinions about what triggers an audit.

Many believe that filing at or near a deadline reduces audit risk. Who knows, the crush of other filers April 15th might reduce the chance that your return will stand out. Of course, that logic may also apply to the crush of extended returns filed on October 15th. Just go on extension if you need the time.

Need more time to pay, and wish that you could get an Obamacare-style delay? Don’t hold your breath for an extension of the April 15 tax due date.

You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

via The Tax Lawyer http://ift.tt/1hvnWRj

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