Tax Tip – Extension of Time to File

Tax Tips provided by Don Fitch, CPA

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)).

Observation:

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
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Palm Desert, CA 92260

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Email: DonFitchCPA@paylesstax.com
Website: http://www.paylesstax.com

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This blog post is intended to serve solely as an aid in continuing tax education for Don Fitch Accountancy blog and email members. Due to the constantly changing nature of the subject of the materials, this product is not appropriate to serve as the sole resource for any federal tax, accounting opinion, tax return position, and must be supplemented for such purposes with other current authoritative materials. The information in this blog post has been carefully compiled from sources believed to be reliable, but its accuracy is not guaranteed. In addition, Don Fitch Accountancy is not engaged in rendering legal or other professional services and will not be held liable for any actions or suits based on this blog post, email, or comments made during the above presentation. If legal advice or other expert assistance is required, seek the services of a competent professional.

(Updated 02/16/2021 15:22)

Published by Don Fitch, CPA

Offers in Compromise, Wage Levy Releases, Installment Agreements, IRS Audits, and much more IRS assistance. Also, allow us to Help you complete your Tax Returns from 1913 to present (100+ Years) and for any of the 50 States.

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