“We filed roughly 25 percent more extensions this year than our average,” said Laura Strombom, EA, of Stockton, Calif.-based All About Numbers. “I attribute this to a late start to the season. We pre-schedule our clients for dates starting in mid-January. Virtually all clients scheduled prior to the first possible e-file day of January 30 rescheduled their appointments until their returns could be filed.”
“I usually file 80 to 90 extensions. This year I filed 215,” said Timothy Oatney, a CPA with Oatney & Associates in Lancaster, Ohio, and member of the National Association of Tax Professionals. “I started filing extensions in the third week of March. I saw that completing the usual amount of returns by April 15 was not going to be possible.”
“Some clients are blaming tax preparers for the delay instead of the government. ‘Some clients perceive this as I’m sloughing off,’” Oatney was quoted in the Lancaster Eagle Gazette (http://www.lancastereaglegazette.com/apps/pbcs.dll/article?AID=2013304110023) on April 11.
Theodore Prioleau, EA, of Parkton, Md.-based Teddy The Tax Man, filed 32 extensions, “but I had probably 12 to 16 (the ones we never talk about) for whom I am hoping refunds are due,” he said. “Why? Because they’re a combination of: ‘Teddy, I’ll get back to you with the information’ (but never did); they ended up in that zone where we just couldn’t prepare them in time or file an extension; and some were overlooked, to be honest with you.”
Prioleau said he left his office at 1:22 a.m. on the day after T-day. “I’m working on those returns at a two or three per day clip. I’m tired! In fact, my voicemail greeting from the 16th, through April 21st said, ‘This is Teddy The Tax Man. I am tired! Leave me a message!’”
Late filing, late forms, late documents
“I filed more extensions this year than ever before. Over 100!” said Phoenix-based RTRP Marvin Nasses. “I’ll have to delay summer fun to diligently work on extensions and amended returns. I have the information to file many of the returns, [but] just did not have the usual time during tax season for well-known reasons.”
Well-known indeed: late forms, a late start to the season, last-minute tax law changes. Bill Pike, an EA at West Palm Beach, Fla-based Pike $ Taxes who reported right after Tax Day that he had 50-plus extensions (“more than ever”), also blamed a variety of factors, including partisan political infighting in Washington and media reports that convinced the public they couldn’t file until near the end of tax season.
“I had people backed up in lines waiting to do their return,” he added. “I tried to hire qualified help but couldn’t find people that had taken and passed the test, and I didn’t want to hire just anybody. I haven’t tried to get any new clients because I cannot handle the clients I have due to the government screw-ups and infighting.”
“The biggest issue is the issuance or late issuance of 1099s,” said Royal Palm Beach, Fla.-based EA Jeffrey Schneider, an NATP member. “More and more people waited until the end of March to come forward for fear of having to amend — not once, but in some cases twice — their returns due to these institutions correcting their forms, some for pennies.
“I had more people placed on extensions, with more and more owing money,” he added. “Many of these individuals didn’t have the cash to pay on April 15, as they planned on requesting the automatic installment agreement. I had to work later than ever on both April 13 and April 14 to get accurate numbers prepared. Some people who came to me with most of their deductions wanted to review it after April 15 when they saw that they owed money. ”
All About Numbers’ Strombom also cited delays in receipt of brokerage statements, as well as revised brokerage statements, that “pushed many of my clients to the last few weeks of tax season. Clients who receive K1s were even further delayed,” she added. “Many clients with kids in college came unprepared, as 1098Ts were generally not mailed, assuming kids would download the documents and give to parents. Several of my extensions are still waiting for this information!”
“The season is not really over at this point,” said Steven Potts of Potts’ Taxes, in Fullerton, Calif., an NATP member. “I don’t expect it to be over until sometime in late May or early June, primarily due to slow filings of 1065s and 1120S returns and their impact on the individual taxpayers.”
“Every year, I’m filing more extensions,” noted John Stancil, a CPA and NATP member in Lakeland, Fla. “Not too many years ago I rarely, if ever, filed extensions. This year, probably 15 to 20 percent of my clients are on extension.” Besides late documents such as 1099s, “as the Tax Code has become more complex and people’s lives more complex, [taxpayers] don’t get their information gathered as quickly as in the past.”
Stancil added, however, that he doesn’t view extensions as extra workload in the the short term. “It takes less time to file an extension with a reasonable estimate of the tax liability than it does to prepare the full return,” he said. “So I see extensions as a load shifting, moving the actual preparation of the return to a later date.”
That brings one plus, Strombom added: “I appreciate extensions as they provide additional post-season work, which means post season revenue!”