The Treasury is recommending the Trump administration push back the April 15 tax deadline amid concerns over coronavirus, Treasury Secretary Steven Mnuchin told reporters on Wednesday.
"We are going to recommend to the president that we allow a delay," he said after speaking on Capitol Hill. He appeared before the House Appropriations Committee on Wednesday, where he suggested pushing back the deadline.
"That will have the impact of putting over $200 billion back into the economy and that will create a very big stimulus," Mnuchin said.
The delay would be "for virtually all Americans, not the super-rich, that's our recommendation," he said.
How exactly this delay would unfold was not clear. The IRS referred questions to the Treasury, which did not immediately respond to emails and a phone call.
Individual taxpayers aren't the only ones watching. Owners of small businesses face a deadline next week: March 16 is the tax return deadline for partnerships and S-corporations.
As Treasury secretary, Mnuchin has the authority to push out the deadline for tax filings and payments for up to six months, said Nicole Kaeding, vice president of policy promotion at the National Taxpayers Union Foundation.
In the event of a federal disaster, that authority could extend to up to one year, she said.
If you need more time to file your taxes, you don't have to wait for Washington: You could go on extension.
In that case, you pay the taxes owed by April 15, and ask the taxman for six more months to wrap up your return.
"What's important to the extent you can't file your return is that there is an extension to file and anyone can take advantage of it," said Gary DuBoff, CPA and principal in the tax and accounting department at MBAF in New York.
Globally, there have been more than 121,000 confirmed cases of COVID-19, according to data compiled by Johns Hopkins University. Of these, more than 1,000 are in the U.S., Johns Hopkins found.
The IRS had received 59.3 million individual income tax returns as of Feb. 28. Of these, 56.7 million were filed electronically.
Nevertheless, a pandemic could have a ripple effect on tax professionals and filers.
"Many low-income individuals use the Volunteer Income Tax Assistance program and have a volunteer prepare their returns at no charge," said Kaeding.
Normally, these locations are available at community centers, libraries and schools — places people may not want to be as COVID-19 continues to spread.
"Many of those clinics and sessions will likely need to close as the disease progresses," said Kaeding.
There's also the question of what kind of service CPAs and taxpayers might encounter from the IRS as the disease continues to spread.
"There are lots of individuals who utilize their service to get assistance filing their own returns, or they're practitioners with questions concerning clients," said Barry Picker, CPA and co-founder of Picker & Auerbach in Cedarhurst, New York.
Widespread COVID-19 could even hit tax professionals close to home.
"What happens if the accountant is sick?" asked Picker. "I think the unfortunate truth is that if it's in our office, then everyone is going to be quarantined."
Until Treasury provides a clear path on how it will proceed, the best course of action is to wrap up your return.
If you think you need more time, calculate the estimated taxes you'll owe for 2019 and send payment to the IRS by April 15 — as per usual. Ask for a six-month extension to file your actual return.
Meanwhile, if you have everything you need to file, get to it.
"Nothing is official, so if you are close to finishing the return, go ahead and finish," said Kaeding.