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Does filing an extension
have any effect on whether or not my tax return is selected by IRS for audit?
 Contrary
to popular belief, as well as what IRS reveals, it is absolutely true that the
later you file your tax return, the less likely you are to be selected by IRS
for audit. Although this has been my professional experience, it has also been scientifically proven by Amir D. Aczel, PhD and very well
described in his book "How To Beat the IRS At Its Own Game"
Another other good reason to file an extension is the fact that it is often
impossible to do the best tax return if you have to rush and work with
incomplete information before April 15. It is very often the case that all
of the documents necessary to prepare your tax return, such as K-1 schedules,
are not available by April 15.
I can also tell you from personal experience
that there is less chance of a mistake by your preparer after April 15. The huge
volume of work, and limited sleep in the month leading up to April 15, do not
always allow for the most error-free working environment.
The first extension request should be sent to IRS on
Form 4868 by April 15,
2004 along with a payment for any tax you expect to owe with the 1040.
Because April 15 is also the due date for the first estimated tax payment for
2004, there is a good chance that IRS will misapply the payment. You can
reduce the odds of this happening by writing the year "2003" and "4868" on the
front of your check, along with your Social Security number.
Additional extensions can be obtained by filing
Form 2688
with your IRS Service Center. The first one (to October 15) doesn't need
much more than this as the reason:
We have been unable to
assemble all of the information we require to prepare a complete and
accurate tax return by the deadline.
Additional extension requests (to December 15 and beyond) do require more
explanation of why you need more time. Some 2688 forms may be sent back
marked as not approved by idiots at the service center who are under the false
assumption that six months is the longest extension available. Extensions
are really only needed in order to avoid the late filing penalty, which is
assessed on the tax due with the return. The act of having filed the
extension requests in a timely manner will still suffice to convince IRS that
the penalty is inappropriate, even if it was marked as not approved.
KMK
This page was last updated:
Friday, October 15, 2004 04:22:59 PM
Ozarks Time by KMK
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