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OSCPA asks Congress for taxpayer relief in wake of reform

Written on Feb 1, 2019

The Ohio Society of CPAs this week sent a letter to Ohio’s Congressional Delegation urging them to provide relief to taxpayers in the wake of tax reform and the recent federal government shutdown.

The IRS adjusted its withholding tables as part of its implementation of the Tax Cuts and Jobs Act. However, the tables did not account for factors such as the elimination of personal and dependency exemptions or reduced itemized deductions. As a result, many taxpayers have been unable to accurately calculate their tax liability for 2018 and might have inadvertently under-withheld their taxes.

OSCPA Tax Policy Director Greg Saul, Esq., CAE, wrote that Congress needs to act to ensure taxpayers are served fairly.

“While the IRS has already stated it will waive the underpayment penalty for individuals who paid at least 85% of taxes due by Jan. 15, 2019, we believe more should be done,” Saul wrote, “particularly in view of the federal government shutdown that made it difficult for taxpayers to secure timely guidance.”

OSCPA’s efforts were added to those of the AICPA, which earlier this week sent the IRS and the Department of the Treasury a letter requesting five additional recommendations beyond what has already occurred:

  • Taxpayers should receive relief from underpayment penalties if they paid at least 80 percent of the tax due for the current year or they paid 80 percent (100 percent if their adjusted gross income (AGI) exceeds $150,000) of amount of tax shown on their U.S. income tax return for the prior year.
  • Taxpayers should also receive relief from late payment penalties if they make a timely request for an extension of time to file their income tax return and pay at least 80 percent of the taxes owed with the request.
  • The IRS should establish an expedited process to grant individuals’ payment penalty relief for reasonable cause due to the considerable uncertainty surrounding the TCJA.
  • Taxpayers need the IRS to identify specific circumstances for which providing automatic relief of penalties for the 2018 taxable year is appropriate, thus relieving them of the administrative burden of requesting a waiver of penalties.
  • The IRS should also provide businesses and tax-exempt organizations relief from underpayment and late payment penalties.

“On behalf of The Ohio Society of CPAs’ 26,000 members, we hope you, too, will encourage the IRS to support this pro-taxpayer action,” Saul wrote.

You can read Saul’s letter in its entirety here. And to stay on top of developments and the profession’s advocacy efforts, visit the AICPA’s Tax Reform Resource Center.