Yesterday February 20, 2025, U.S. Senators Marsha Blackburn (R-Tenn.) and Catherine Cortez Masto (D-Nev.) introduced the Tax Administration Simplification Act to provide straightforward, taxpayer-focused improvements to streamline tax filing and payment for individuals and small businesses:
“Taxpayers shouldn’t be penalized when the IRS is delayed in processing their tax returns even though they submitted them on time,” said Senator Blackburn. “Our Tax Administration Simplification Act would shield taxpayers from unfair penalties, streamline tax filing, and provide more flexibility for small businesses.”
“Small businesses in Nevada are busy enough as it is without having to worry about unfair IRS penalties and burdensome red tape,” said Senator Cortez Masto. “This bipartisan legislation would save time for the hard-working small business owners that are growing our economy and creating jobs in Nevada.”
TAX ADMINISTRATION SIMPLIFICATION ACT
The Tax Administration Simplification Act aims to reduce filing burdens and make tax compliance more intuitive by:
Protecting taxpayers from penalties due to Internal Revenue Service (IRS) delays in electronic filing – Under current law, even if taxpayers submit documents on the due date, they may be considered late unless submitted physically. The bill would extend the existing “mailbox rule” to electronically submitted documents, ensuring they are considered timely based on the date submitted, regardless of potential IRS processing delays. The correction would protect taxpayers from penalties and potential audits stemming from processing lags that are beyond their control.
Simplifying S-Corp elections for small businesses – Many small business owners miss out on the tax benefits of “S-Corp” status because the current election deadline precedes the deadline for filing their first income tax return. The bill would allow business owners to make an S-Corp election on their first timely filed tax return, providing greater flexibility and reducing unnecessary penalties.
Standardizing estimated tax deadlines – The bill would also address the confusing, irregular schedule for estimated tax payments, which currently requires payments at inconsistent intervals throughout the year. By moving to evenly spaced quarterly deadlines, the bill would simplify planning and help taxpayers more easily manage and project their income for accurate tax reporting.
Click here for bill text.
