Limited Relief on March 1 Filing
The IRS is announcing in IR-2022-49 that farmers who had issues with filing their income tax return that had an S corporation that required Form 7203 to be filed with the return now have until April 18, 2022 to file their income tax return without incurring any penalty for not paying a tax estimate on January 15.
Here is the verbiage from the release:
IRS update regarding recent electronic filing challenges in connection with Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations
WASHINGTON — The IRS is aware of a third-party software issue affecting qualifying farmers and fishermen attempting to electronically file Forms 7203.
Qualifying farmers and fishermen are those who are not subject to an addition to tax for failing to pay the required estimated tax installment payment by January 15, 2022, if they file their returns and pay the full amount of tax reported on the return as payable by March 1, 2022.
The IRS has been working closely with software providers to ease the impact on qualifying farmers and fishermen caused by electronic filing challenges in connection with Form 7203.
Due to these challenges, the Treasury Department and the IRS intend to issue a notice providing penalty relief for qualifying farmers and fishermen filing Forms 7203 if they electronically file their 2021 tax return and pay in full any tax due by April 18, 2022, or by April 19, 2022, for those qualifying farmers and fishermen who live in Maine or Massachusetts.
Farmers and fishermen who filed their returns by the March 1 deadline are unaffected by this news release.
As you can see this is limited relief. Only those farmers with an S corporation required to file Form 7203 qualify. There will be additional guidance on how to get this relief but for now, know that if you meet this requirement you now have until April 18, 2022 to file your return.
We will keep you posted on how to process your return. Perhaps there may be more relief for other farmers who could not make the March 1 deadline.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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