法律英语：26 Filing for a Tax Extension (I)

by Michael W. Flynn

First, a disclaimer: Although I am an attorney, the legal information in this podcast is not intended to be a substitute for seeking personalized legal advice from an attorney licensed 1 to practice in your jurisdiction 2. Further, I do not intend to create an attorney-client relationship with any listener.

Taxes. Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” This episode is one of a two-part series on your federal income taxes. This episode will cover the basic mechanics of filing for an extension. The second episode will feature Money Girl, another QD Now podcaster. We will discuss the pros 3 and cons 4 of filing late, both legal and practical. We will also give you some last-minute tips on completing your return.

The quick and dirty tip for all tax filings is to be complete, timely, and accurate. This advice may sound simple, but following it will help you avoid many problems down the line. One very important point to remember is that an extension to file your return is not an extension to pay your taxes. An extension simply allows you more time to fill out your return.

Normally, your federal taxes are due on April 15 of each year. This year, April 15 falls on a Sunday, and Monday, April 16 is Emancipation 5 Day, a holiday in Washington, D.C., so the IRS has pushed the deadline back to April 17. You still have time to finish (for some of us, start) your tax return.

A tax return is a complicated endeavor that requires many forms and careful attention to detail. You might be missing forms such as an employer’s W-2 that would prevent you from accurately 6 completing your return. Or, you may have invested in a partnership 7 that has not yet paid you for your investment, which might count as your income. If you cannot accurately complete your return, you should file for an extension.

First, the mechanics of filing for an extension to file are pretty simple. All you must do is file Form 4868 from the United States Treasury 8 department. ........You are not required to indicate a reason for filing for an extension. The IRS will only contact you if your extension is denied.

You only need to fill out the form and file it by April 17. If you timely and properly file, then you will get a six-month extension and do not need file your return until October 15. If you e-file, and your extension is rejected, you have until April 21 to correct your e-filing. If you cannot correct your e-file, then you must file for an extension in paper form by April 21.

Again, it is important to note that an extension for filing your return is not the same as an extension to pay your taxes. When completing Form 4868, you will need to estimate your total tax liability for 2006 and subtract any income tax you have already paid. You will find that by completing the estimate portion of Form 4868, you will perform most of the calculations you need to complete your return. So, consider just buckling 9 down and finishing your return in full.

If you do choose to file an extension, you must pay at least 90% of your estimated tax liability in order to avoid penalties. Any tax liability owed that you pay after April 17 will incur 10 interest and additional penalties until you pay the tax. You can avoid paying penalties and interest if you submit a statement explaining the reason for failing to pay and have paid 90% of your estimated taxes.

It is also important to be honest and accurate in estimating your tax liability on Form 4868. If the IRS later finds that your estimate was unreasonable 11, the extension for filing your return will be considered void, and you will face all the penalties and interest that you would have for failing to file your return.

Once you have properly submitted Form 4868, you have some breathing space. Please note that failing to file for an extension is not likely to lead to criminal prosecution 12 by the IRS. The agency has a long-standing practice of not recommending criminal prosecution of individuals who make mistakes. They know that the government will get more money by informally resolving disputes and bringing people back into the system than by paying lawyers to prosecute 13 every case.

Last, consider your state taxes. Many states automatically give you an extension if you properly filed for a federal extension. If not, you will also need to file for an extension in your state.

Thank you for listening to Legal Lad’s Quick and Dirty Tips for a More Lawful 14 Life.

You can send questions and comments to...........or call them in to the voice-mail line at 206-202-4LAW. Please note that doing so will not create an attorney-client relationship and will be used for the purposes of this podcast only.

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