IRS Eases Extension Request Rules: A Simpler Way to File Later

Article excerpt

Temporary regulations issued under IRC section 6081 (TD 9229, 1i/4/05) simplify how individuals, partnerships and others can obtain an automatic six-month extension of time to file a number of income tax returns with a single request. The rules also remove the requirements for a signature and an explanation of the need for an extension, and render the use of certain other extension forms obsolete.

Generally, the temporary regulations are effective for certain returns due after 2005, so CPAs need to be familiar with them this filing season.

INDIVIDUALS

The timely submission of a completed application for extension on Form 4868, Application for Automatic Extension of Time To File a U.5. Individual Income Tax Return, now provides an automatic six-month extension, with no need for a signature or explanation. (Previously, a first extension request was good for four months; a taxpayer needed to file an additional request to gain two more months.)

As always, the extension does not extend the time for payment of tax. Taxpayers must make a proper estimate of any tax due. While no tax payment is required to obtain the extension, failure to pay any tax as of the original return due date may subject the taxpayer to penalties and interest.

CORPORATIONS AND OTHER ENTITIES

The new rules do not change the current method for filing extensions for corporate income tax returns; rather, they broaden its scope. The form previously used for a corporate extension (Form 7004, Application for Automatic Extension of Time to File Corporation Income Tax Return) will now also be used by partnerships, real estate mortgage investment conduits, certain trusts and taxpayers requesting additional time to file various excise, income, information and other returns.

The regulations have changed the title and appearance of Form 7004. …

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