Today, Congresswoman Suzan DelBene (WA-01), a member of the tax-writing Ways and Means Committee, introduced bipartisan legislation to simplify the tax filing and payment processes for taxpayers and small businesses.
The Tax Administration Simplification Act would apply the ‘mailbox rule’ to electronically submitted documents and tax payments to the IRS, allow newly formed small businesses to elect to be treated as an S Corporation on their first tax filing, and revise the estimated tax payment deadlines to fall on quarterly intervals instead of the current irregular payment schedule.
This legislation is cosponsored by Representatives Darin LaHood (IL-16), Brad Schneider (IL-10), Randy Feenstra (IA-04), Brian Fitzpatrick (PA-01), Jimmy Panetta (CA-19), and Debbie Lesko (AZ-08).
The bill would:
- Incorporate recommendations from the National Taxpayer Advocate's annual "Purple Book" and builds off previous legislation to streamline the tax filing process.
- Apply the ‘mailbox rule’ to documents and payments electronically submitted to the IRS.
- Under current law, if taxpayers submit payments or documents to the IRS electronically on the due date, but they are received and processed the next day, they would be considered late.
- The Tax Administration Simplification Act makes changes to the law to provide for documents and payments submitted electronically to be considered made on the date submitted, even if they are not received or reviewed until a later date.
- Extend the time for making S Corporation elections.
- Under current law, many small business owners miss the deadline for electing to be treated as an S Corporation because the election deadline generally precedes the filing deadline for the corporation’s first income tax return.
- The Tax Administration Simplification Act would allow taxpayers to elect S Corporation status on their first timely filed income tax return.
- Revise estimated income tax payment deadlines.
- Under current law, estimated tax payment deadlines are spaced at uneven intervals throughout the year. While these payments are often referred to as “quarterly payments,” they are currently spaced at three-month, two-month, three-month, and four-month intervals.
- The Tax Administration Simplification Act would change the estimated tax payment deadlines to actually fall on a quarterly basis and make it easier for taxpayers to calculate their net income.
A copy of the bill text is available here.
