A bipartisan bill unveiled Feb. 20 by U.S. Sen. Marsha Blackburn (R-TN) aims to streamline tax filing and payment for both individuals and small businesses.
The Tax Administration Simplification Act would amend the Internal Revenue Code of 1986 to extend the period of time for making S corporation elections, according to the text of the bill.
“Taxpayers shouldn’t be penalized when the IRS is delayed in processing their tax returns even though they submitted them on time,” Sen. Blackburn said. “Our Tax Administration Simplification Act would shield taxpayers from unfair penalties, streamline tax filing, and provide more flexibility for small businesses.”
If enacted, the Tax Administration Simplification Act would extend the existing mailbox rule to electronically submitted documents, ensuring they are considered timely based on the date submitted, regardless of potential IRS processing delays.
The correction would protect taxpayers from penalties and potential audits stemming from processing lags that are beyond their control, according to a bill summary provided by Sen. Blackburn’s staff.
Additionally, the bill would allow business owners to make an S-Corp election on their first timely filed tax return to provide them with greater flexibility and reduce unnecessary penalties, and would move to evenly spaced quarterly deadlines to simplify planning and help taxpayers more easily manage and project their income for accurate tax reporting.
“Small businesses in Nevada are busy enough as it is without having to worry about unfair IRS penalties and burdensome red tape,” said U.S. Sen. Catherine Cortez Masto (D-NV), who introduced the bill alongside Sen. Blackburn. “This bipartisan legislation would save time for the hard-working small business owners that are growing our economy and creating jobs in Nevada.”