Individuals can request an automatic six-month extension of time to file their income tax returns. For a calendar-year taxpayer, this would extend the due date for filing from April 15 to October 15 (Reg. Sec. 1.6081-4(a)).
Caution: The automatic extension only extends the due date for filing the return – it does not extend the due date for paying any tax due by the regular due date (Reg. Sec. 1.6081-4(c)).
Don Fitch CPA Practice Pointer:
An individual can request the automatic extension by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return either electronically or by mail by the due date of the return. An individual also can get the extension by paying part or all of his or her estimate of tax due by using a credit or debit card by phone or over the Internet. The individual does not file Form 4868 in this case.
The extension request must show the full amount properly estimated as tax for the tax year (Reg. Sec. 1.6081-4(b); Rev. Rul. 79-113). The Second Circuit has held that a taxpayer should be treated as having properly estimated his tax liability when he or she makes a bona fide and reasonable estimate of his or her tax liability based on the information available to the taxpayer at the time he or she requests the extension (Berlin v. Comm’r, 59 F.2d 996 (2d Cir. 1932)). This requires the taxpayer to judge or determine his or her tax liability generally, but carefully. Thus, if a taxpayer, in a Form 4868 request for automatic extension, estimated his or her tax liability to be zero, even though at the time the taxpayer submitted the request, he or she had ample evidence discrediting the estimate, the Form 4868 would be invalid. Further, to be treated as having properly estimated his or her tax liability, the taxpayer must make a bona fide and reasonable attempt to locate, gather, and consult information that will enable the taxpayer to make a proper estimate of his or her tax liability (Crocker v. Comm’r, 92 T.C. 899 (1989)).
The taxpayer does not have to pay the properly estimated tax with the Form 4868 in order to obtain a filing extension. However, as noted earlier, a filing extension does not extend the due date for paying any tax due.
The IRS can terminate an automatic extension at any time by mailing the individual a notice of termination at least 10 days before the termination date designated in the notice. The IRS must mail the notice of termination to the address shown on the Form 4868 or to the individual’s last known address (Reg. Sec. 1.6081-4(d)).
DON FITCH, CPA
74478 Highway 111 #3
Palm Desert, CA 92260
Toll Free: (877)CPA-Help or (877)272-4357
(Updated 02/16/2021 15:22)