The IRS has granted relief related to the CCH electronic filing software outage that took place on September 15, 2020.[1]

CCH suffered an outage in their online systems that began in the afternoon of October 15, 2020 and continued throughout the evening. CPAs that used their systems found themselves unable to submit tax returns electronically on the last day to timely file extended partnership income tax returns.

The inability to timely file the returns creates more than just late payment penalty concerns—some elections are only valid if made with a timely filed return. Thus, a number of CPAs were very concerned about the impact of this system failure on their clients.

The IRS has taken note of the situation and offered the following relief:

IRS will treat as timely filed a return and any elections that were filed with that return (for example, a Form 3115, Application for Change in Accounting Method) that were impacted by the September 15, 2020, external tax software outage if the taxpayer successfully e-filed the return and any elections that were filed with that return by September 17, 2020.

Some may be wondering why the IRS finally announced the date the late filed return had to be filed by a week later. After all, is it fair to require tax professionals to act before the IRS gives the relief guidance? The agency’s emphasis in the following paragraph makes it clear that when such situations take place, taxpayers and their advisers are expected to attempt to correct issues as soon as possible—and, it would seem, not wait to hear from the agency to find out what the deadline to take action will be:

As a matter of routine course, the IRS encourages all taxpayers who cannot file on time to file for an extension, if they are eligible. A taxpayer who is not eligible for an extension should make every attempt to file on the due date or as soon as possible afterwards. (emphasis in the original document)

[1] Memorandum for All Services and Enforcement Employees, External Tax Software Outage on September 15, 2020, September 24, 2020, https://www.irs.gov/pub/irs-utl/9-15-20-outage-memo.pdf (retrieved September 25, 2020)