Treasury Secretary Steven Mnuchin told Congress on Wednesday that the White House is planning to delay the April 15 federal tax deadline.
Mnuchin highlighted the benefit of the delay, which would temporarily free up about $200 billion in the bank accounts of small businesses and individuals — outside the nation’s most wealthy. He told the House Appropriations subcommittee that President Trump could grant the delay without Congressional approval and that the Treasury is expected to recommend the delay.
“We think we can provide over $200 billion of liquidity into the economy by delaying certain tax payments,” Mnuchin said at the hearing, describing the delay as a “good stimulus” to answer the economic impact of the coronavirus.
Senate Finance Chairman Chuck Grassley added his own support to the proposal. “I think it would help all taxpayers,” he said Wednesday. “People don’t have to take advantage of it but if they want to, it’s all voluntary. And it’s something that can be done right now.”
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, emphasized the ongoing risk of “COVID-19,” more commonly known as coronavirus, on Wednesday. “Although we are containing it in some respects, we keep getting people coming in from the country that are travel-related,” he said. “We’ve seen that in many of the states that are now involved. And when you get community spread, it makes the challenge much greater.”
So I can say we will see more cases, and things will get worse than they are right now. How much worse we’ll get will depend on our ability to do two things: to contain the influx of people who are infected coming from the outside, and the ability to contain and mitigate within our own country. Bottom line, it’s going to get worse.
According to Mnuchin, the Internal Revenue Service would also waive the typical interest payments and penalties for filing after the deadline. The current policy grants an automatic delay to those who do not file by the deadline but requires additional payment to account for the extra time required.
There is, however, one potential complication: individual states typically operate on the same tax deadline and would not be affected by the decision to delay the federal tax deadline. “So while the simple idea of ‘move the date back and give taxpayers more time’ may seem good and easy, the issue is one with many complex considerations on exactly how to do it and how long to do it,” said Mark Steber, senior vice president and chief tax officer at Jackson Hewitt Tax Service Inc.
To date, approximately one-third of the tax returns expected by the IRS have already been filed.