IRS makes it easier for noncorporate taxpayers to get filing extension

IRS makes it easier for noncorporate business taxpayers to get filing extension

Requesting a filing extension for business tax returns, as well as individual, estate and gift tax returns, is easier now that the IRS has simplified the process.

Business tax returns: All business taxpayers who previously had to file extension forms 8800, 8736, 7004 and 2758 now only need to file the revised Form 7004, “Application for Automatic 6-Month Extension of Time to File Certain Business Income Tax, Information, and Other Returns.” The revised Form 7004 grants taxpayers an automatic six-month extension without the need to file intervening forms. For the 2005 filing season, taxpayers must file Form 7004 by the due date of the return in order to receive an automatic six-month filing extension. The extension period is calculated from the due date of the return.

New regulations make this option available to most noncorporate business taxpayers, including partnerships and trusts. Previously only corporations could request an automatic six-month tax-filing extension. All eligible noncorporate business taxpayers had to request an initial three-month extension and, if necessary, then had to request another three months.

Individual returns: An individual taxpayer may request an automatic six-month extension by filing Form 4868. More details are available in the Internal Revenue News Release 2005-131, published Nov. 4, 2005.

Estate tax returns: Revised Form 4768, “Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes,” allows a single six-month extension for all Form 706 return filing. The request must be made on or before the due date of the Estate Tax Return.

Gift tax returns: A revised Form 8892, “Payment of Gift/GST Tax and/or Application for Extension of Time To File Form 709,” must be filed for 2005 extension requests when the taxpayer is extending Form 709 only, without extending the Form 1040, or when the taxpayer is paying a gift tax liability. It may be used to request an automatic six-month extension for filing the Form 709 in those cases where a Form 4868 was not filed.

Filing extension does not extend time to pay

Approval of an extension requested on forms 7004, 4768 and 8892 is automatic. Taxpayers do not need to sign the extension request or explain why they’re requesting an extension. The IRS will not issue a confirmation of receipt of the request and will issue a response only if the extension request is denied.

An extension of time to file is not an extension of time to pay. Taxpayers will owe interest on any past-due tax, and may be subject to a late-payment penalty if payment is not made by the due date of the return.

Simplifying, consolidating and standardizing extension forms is expected to reduce taxpayer burden and will also reduce taxpayer confusion and error about filing the correct form.

You can find IRS forms 7004, 4768, 4868 and 8892 on the IRS Web site.