Why the Paperwork Reduction Act May Be the Reason the IRS is Delaying Tax Season
The Internal Revenues Service (IRS) recently announced that it will delay tax season. Although it usually begins accepting tax returns in late January, this year it will not begin accepting taxes until Friday, February 12. The IRS cited the December 27 tax changes from the new stimulus as the reason. However, left unstated, the Paperwork Reduction Act (PRA) may have played a significant factor in the delay.
Last October, I wrote an article explaining the PRA and why its timeline may delay tax season. In short, the PRA process for agencies collecting information from ten or more people requires the Office of Information and Regulatory Affairs (OIRA) to approve the collections of information. This process involves 90 days of comment. Specifically, an agency must request public comments on the proposed collection of information through a 60-day comment period in the Federal Register. After considering the public comments, the agency must concurrently (i) submit the collection of information—including the agency’s supporting statement regarding the form—to OIRA for review and (ii) publish a notice in the Federal Register that the agency sent the request to OIRA and the public has 30 days to send any comments to OIRA.
The IRS delayed beginning the PRA process for this year’s tax forms. It published in the Federal Register on October 30, 2020 and November 3, 2020 the 60-day notices associated with the 2021 individual and business income-tax forms, respectively. The comment periods closed on December 29, 2020 and January 4, 2021. The IRS then published in the Federal Register on January 11, 2021 the 30-day notices associated with sending both the individual and business income-tax forms to OIRA. As such, the 30-day comment periods end on February 10, 2021.
This PRA timeline matches up perfectly with the start date of the 2021 tax season. With the 30-day comment periods for the associated forms closing on February 10, the earliest OIRA could approve the forms is February 11. Assuming OIRA approves the tax forms on that date, the earliest the IRS could begin using the forms is February 12, which is exactly when the IRS is beginning to accept tax returns. If not for the PRA timeline, February 12 is especially an unusual date to begin accepting tax returns as it is a Friday. This is not to say that the PRA is the only reason the IRS needed to delay the beginning of tax season: The December 27 tax changes may have been a contributing factor. However, the PRA likely played a significant factor in delaying tax season so that it begins on Friday, February 12.