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The Simplify Automatic Filing Extensions (SAFE) Act of 2023, or H.R. 3566, was put forward by Rep. Judy Chu, D-California, and Mike Carey, R-Ohio. Unlike the existing method that requires a calculation of a percentage of the current year's tax liability, the SAFE Act would permit taxpayers to qualify automatically for a filing extension. This would remove the worry of facing a penalty by enabling taxpayers to pay an amount calculated on 125% of the tax liability of the previous year.

As per the existing Internal Revenue Code, taxpayers are obligated to pay the "properly estimated" tax liability for the ongoing year along with their request for extension. If the estimated payment is found inaccurate, the extension might be considered the same, leading to penalties for the taxpayer. Consequently, the current rules necessitate tax filers and their preparers to engage in time-consuming calculations of the taxes due by the April filing deadline, merely to request an extension. This often forces individuals to invest a significant amount of time into their initial estimation, only to repeat the procedure six months later to meet the extension deadline.

Chu explained that the double calculation of often complex taxes within a year for taxpayers seeking an extension is both repetitive and burdensome. She said, "Rep. Carey and I are collaborating on this sensible bill to devise a straightforward and easy method to pay estimated taxes during extension filing, making tax filing season less onerous for both the IRS and taxpayers. Streamlining compliance with tax laws will lead to more taxpayers settling their dues, enabling the government to sustain its essential services."

The intention of the lawmakers is to simplify the process of tax extension. Carey, in a press release, stated that, "The process of filing for an extension should not be a cause of stress, nor should it. Simplifying this process and eliminating penalty fears will benefit both taxpayers and the IRS. I'm delighted to collaborate with Rep. Chu on this bipartisan legislation that will enhance government functionality for taxpayers."

The American Institute of CPAs has shown support for the proposed legislation. "The AICPA has been advocating for and encouraging good tax policy principles to members of Congress, Treasury, and the IRS for decades — the SAFE Act embodies such principles for taxpayers and practitioners," Edward Karl, AICPA vice president of taxation, said in a press release. "Complicated tax returns often cause significant time burdens for taxpayers and their advisors. Simplifying these procedures will alleviate taxpayer stress and boost tax compliance. We are grateful to Representatives Chu and Carey for their efforts to simplify automatic extension filings, and we firmly endorse this legislation."

Talley’s team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on your assets and wealth to the next generation. We welcome the opportunity to discuss the current options available for you. For more information, contact us today.


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