WASHINGTON – Some taxpayers won’t have to file their taxes by April 15 as part of the Trump administration’s efforts to lessen the economic effects of the coronavirus, the president announced Wednesday.
“I will be instructing the Treasury Department to defer tax payments without interest or penalties for certain individuals and businesses negatively impacted,” President Donald Trump said in an Oval Office address to the nation.
Trump didn’t specify who would get a filing extension and for how long.
But Treasury Secretary Steve Mnuchin told the House Appropriations Committee on Wednesday any extension would help “small and medium-sized businesses and hard-working individuals” heavily impacted by the widespread virus.
Mnuchin said an extension could put billions of dollars into the economy by giving businesses and individuals more available cash.
“This action will provide more than $200 billion of additional liquidity to the economy,” Trump said.
But it may also mean the government will have to increase borrowing in the short-term to pay its bills before all returns are filed.
The extension does not require congressional approval, according to the administration.
Trump said he is using “emergency authority.”
House Democrats have already told the IRS they’re concerned that people may need more time to file because IRS officials and tax preparers may not be as available to assist.
The declaration came as the Trump administration scrambled to respond to the spread of the virus that has now been declared a global pandemic.
The president and his team are trying to put together an economic stimulus plan.
The move comes after more than 1,000 cases of COVID-19 have been reported in the U.S.
Individuals are typically required to pay taxes by April 15 or they face penalties and interest charges. The IRS also grants taxpayers the option to file for a six-month extension.
The Treasury Department could be forced to borrow money following the decision to delay tax payments, the Wall Street Journal reported. About $333 billion in individual taxes were collected in April last year.
On Tuesday, Democrats on the House Ways and Means Committee wrote a letter to the IRS on the impact of the coronavirus on tax filing season. The lawmakers requested a “continued evaluation” concerning the need for an extension beyond the April 15 deadline.
Tax Season 2020:What changes to expect this tax season
“Specifically, we are concerned about the ability of the IRS to provide taxpayer assistance and process returns, as well as the ability of taxpayers, free tax preparation sites, and tax professionals to meet the filing deadline,” the lawmakers wrote to IRS Commissioner, Charles P. Retting.
The newly identified coronavirus has infected more than 115,000 worldwide and resulted in more than 4,200 deaths.
Follow Jazmin Goodwin on Twitter: @jazminkgoodwin.