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Is this the best of all possible tax seasons?

April 28, 2011

When your tax return is likely the biggest monetary event of your year, considering the amount of taxes you pay, does it make sense to require every taxpayer in the country to crunch through their tax forms by April 15? Robert D. Flach weighs in:

* CPA Allan S. Boress suggests a change to the “tax season” that I have heard before over the years in his blog post "Let's Kill Tax Season Before it Kills Us" at ACCOUNTING WEB.

I have always been against this change. I am used to the 12-hour-a-day. 7-day-a-week tax filing season – and can put up with it knowing that on April 15th or so it is over – and I can work maybe 2 or 3 days a week at most the rest of the year.

I have a different point-of-view than Robert. I have a full-time job all year, and then a second one during tax season. Congress makes things more complicated every year. With the additional complication, information -- amended 1099s, K-1s, and so on -- comes in later every year. Tax season is becoming more and more a six-week death march. With so much complexity and so much money at stake, trying to do it all in such a brief window is unwise.

Of course we do plenty of extensions; without them, tax season would be impossible. But even getting a good extension number takes time and effort, and you have to make sure you actually mail or e-file the thing -- one more thing that can be screwed up.

Is the alternative better? I'm always glad when tax season ends, and I fear that a later due date would just extend the suffering. That's why Mr. Boress' rolling-due date proposal, based on birthdates, social security numbers, or something like that, has its attractions. Would it cause more problems than it solves? I don't know, but I think it deserves a closer look. What do you think, readers?

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Comments

At least let partnerships and S corporations have fiscal year ends. Individual year ends may create too much work for employers.

Excellent suggestion. Others?

I'm not sure how it would work for individuals - would employers be required to issue W-2s throughout the year based on an employee's birthday or SSN? What about 1099-INTs or other third-party documentation (mortgage interest, property tax bills)?

You might need a revenue offset for it, but what about requiring flow throughs to have a November or October year end with no extensions unless all member consented to extend their own.


Partnerships and S corps do have the 444 election available, but it is not very popular. I used to try to promote it but over time an entity would have a disastorous December and it would be advantageous to revoke.

You might need a revenue offset for it, but what about requiring flow throughs to have a November or October year end with no extensions unless all member consented to extend their own.


Partnerships and S corps do have the 444 election available, but it is not very popular. I used to try to promote it but over time an entity would have a disastorous December and it would be advantageous to revoke.

Why not do by socails or aphabeticly so

A-j are done in January through March and rest april through June or something like that.

I think it's a good goal, but I don't see how to do it without creating both 1) lots of additional work; and 2) lots of potential loopholes.

I think the best we can do as preparers is encourage our clients (monetarily and/or otherwise) to come in early and often. But to do so, the reward for coming in early (or penalty for coming in late) would have be quite significant. If we could somehow convince a large portion of our non-business clients to come in in December, we could both cut in half the work we have to do in February/March/April *and* give them planning tips they can enact *before* the end of the year.

As for the business clients, all but the absolute smallest should be coming in more often than annually anyway. Those that don't heed that advice either get turned down, pay a lot extra, or have to file an extension. I think with business clients it's a lot easier to enforce that policy.

A deadline of May 15th would really be ideal. The taxing authorites have most of the taxpayments by January 15th anyway so it shouldn't cost the government much money.

It would alleviate the crunch, plus it would keep the professionals a little more focused post-deadline as the next busy season is now a month closer.

Another alternative is the old Florida Intangibles approach. Make a deadline of say June 30th and then give taxpayers a credit for filing early based upon the filing date....

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