Chattanooga CPA says new tax timeline signals scope of coronavirus challenge

'This is unprecedented in the 43 years I've practiced,' said Bill Russell

This July 24, 2018, file photo shows a portion of the 1040 U.S. Individual Income Tax Return form. The IRS began accepting and processing tax returns for individuals on Monday, Jan. 27, 2020. (AP Photo/Mark Lennihan, File)
This July 24, 2018, file photo shows a portion of the 1040 U.S. Individual Income Tax Return form. The IRS began accepting and processing tax returns for individuals on Monday, Jan. 27, 2020. (AP Photo/Mark Lennihan, File)

The three-month extension of the federal tax deadline creates much-needed breathing room during the coronavirus crisis - and signals the extraordinary nature of the times we are all navigating, said Bill Russell, a CPA and partner in the Elliott Davis firm.

"This is unprecedented in the 43 years I've practiced," Russell said.

The shift means no one has to file or pay federal taxes until July 15, but people who expect refunds can file and those refunds will be paid. That gives some clients a good way to hang onto money they might have had to fork over by April 15, said Kyle Bryant, of Market Street Partners.

"We're using this as a strategy now with some clients who do owe a lot," he said. "In times of uncertainty, I'd rather keep my cash than give it to the IRS."

No one is complaining about having extra time to get this work done - particularly as accounting firms were having to shift to working from home in the middle of their busiest season, Bryant said.

"Everyone's relieved, and it was well-received and needed," he said.

photo Staff photo by Erin O. Smith / Kevin Rose, a partner at Market Street Partners, and Kyle Bryant, founding partner of Market Street Partners, at their downtown firm in 2018. Market Street Partners is helping clients navigate new tax deadlines and evaluate their options for financial relief during the coronavirus crisis.

But the change also means people who had expected to sit down with a tax pro and flip through their return may have to adjust their expectations. With most everyone working from home, there are some some hitches in the process for people unaccustomed to doing this work electronically, Russell said.

"There's still a fair amount of the population that is not internet literate," he said. "For them to send their data electronically also makes a lot of people nervous."

Many of those folks are hoping they can plan to sit down with an accountant in May or June, or they are working it out over the phone, Russell said.

"It's not the way it was, it's a change," he said. "Clients understand the times that we are in."

For the time being, H&R Block has kept their offices in Chattanooga open, said spokeswoman Lisa Patterson. But the tax-prep firm, which has 19 offices in the Chattanooga area, is encouraging people to drop off their materials either at the office or upload them online to limit contact, she said.

"If you typically meet with one of our tax pros to prepare your return, now instead, you can drop off your documents or simply call and we'll work with you to upload your documents without coming to an office at all," she said. "After we receive your documents, a tax pro will call with any questions and you can even review and approve your return electronically."

Deadlines yield to pandemic

On March 20, 2020, the Internal Revenue Service announced a federal income tax extension. Reporting, filing and payment deadlines move from April 15 to July 15.The Tennessee Department of Revenue has extended the due date for filing and paying franchise and excise tax from April 15, 2020 to July 15, 2020.The department has extended the due date for filing and paying the Hall income tax from April 15, 2020 to July 15, 2020.The deadline for obtaining vehicle registration renewals that expire in March or April is June 15, 2020.Source: Tennessee Department of Revenue

Meanwhile, the IRS-sponsored Volunteer Income Tax Assistance program, or VITA, which serves people with a household income under $54,000 a year, has had to shut down for the time being.

"We deeply apologize for this inconvenience as we navigate this unusual time together," said Val Palmer, VITA program coordinator of Urban League. "We are closely monitoring this situation as it evolves and encourage our neighbors to do the same. We assure you that we will resume the program as soon as it is appropriate to do so."

In 2019, the VITA program served 13,500 people in the Chattanooga area who received $4.4 million in refunds.

The nature of the coronavirus crisis also means that accountants are working to help their clients understand the constantly evolving shape of other financial relief that will be on its way via a $2.2 trillion federal relief package, said Kevin Rose, of Market Street Partners.

"We've tried to reach out to all of our clients and talk through through this because this is the time they're looking to their CPAs and advisers to help be a stabilizing force," Rose said. "They're making big decisions on the fly. We're not just cranking out tax returns."

Contact Mary Fortune at mfortune@timesfreepress.com or 423-757-6653. Follow her on Twitter at @maryfortune.

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