Tax-filing and payment extensions expire in just days. Many of the more than 12 million taxpayers who requested an automatic six-month extension this year have yet to file, according to the IRS. October 15 is the last day for most filers.
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Some have more time, such as military personnel in combat zones and some residents of flood-soaked Colorado -- but most do not.
“Late filers? God love them,” said Delmar Gillette, of Delmar C. Gillette Economic Planning Services Inc., in Newport News, Va., which in a typical year has between 5 percent and 7 percent of clients on extension. “They’re a challenge because they have postponed starting to file their return. How well do you think these people gather the necessary information to file an extended return? Just getting them to the office for a scheduled appointment is a major challenge.”
“We certainly don’t encourage late filing, because it really just spreads the work load further into the year for us,” said EA Cynthia Jeanguenat with Horizons Unlimited in Virginia Beach, Va.
“The clients who usually request an extension are not always the more organized clients, so the danger in giving them six more months to collect their information is that more information might be lost or misplaced,” she added. “That lost or misplaced information generally takes longer to replace, since payroll firms or departments are more than halfway through a new year and the prior-year info may not be as readily available in September as it was in February or March.”
“We’ve never encouraged extensions, but certainly have some,” said Steven Hanson, a CPA with Minnesota-based Piehl, Hanson, Beckman PA and president of the National Society of Accountants, who added that his firm’s number of individual extensions remains about the same over the last several years.
“We’ve always taken pride in getting most of our returns done on time without extensions,” Hanson said. “That has become more difficult over the years, especially corporate returns with their earlier March due date.”
Not favorite clients
According to Stephen DeFilippis, an EA with the DeFilippis Financial Group in Wheaton, Ill., only about 3 percent of his clients file for an extension -- and he doesn’t encourage them. “[We] only file them in cases where my client does not have all of their documents prior to the regular filing deadline,” he said. “I prefer to get as much done during filing season as possible.”
“I hate extensions! I do not use the word extension without the descriptive ‘GD’,” said Robert Flach, blogger at The Wandering Tax Pro. “One of the reasons I was first attracted to the tax preparation business was that one could work 12 hours a day, seven days a week for three and a half months and basically take off the rest of the year. I long for the days when the tax season truly ended on April 15.”
Recent rule changes allowing automatic extensions until October 15 actually delayed the filing of several individual returns until close to the October filing deadline, according to Hanson. “With the automatic extension only going until August 15, we filed more returns earlier than now. It helped spread our workload out a little better. We now have a mad rush in October to meet the deadline, as a good share of the clients who extend like to wait until the last minute.”
“Most enrolled agents like to get things filed on time so we can move on to other issues we handle during the year,” said Jeanguenat. “Our firm also offers business services, so we are a year-round operation. We also have to find time to fulfill our continuing education requirements, so we have plenty to keep us busy after April 15.”
The IRS urges taxpayers whose extensions run out on October 15 to double-check returns for overlooked tax benefits and then e-file returns.
“We announce up front that if all of the necessary information is not available by April 1, [clients] will go on extension,” said Gillette. “The group always pushing the April deadline is a predictable list and we know almost to the person who will be on it. We do have our favorite clients who sometimes find themselves with unexpected complications and need to be placed on extension. In our clients, going on extension is almost a sin. Some fight it tooth and toenail because it appears to be an admission of some fault. They’re concerned about an extended return being a red flag.”
Late filers, said Gillette, “are certainly worth charging a premium for all of the frustration they bring with them.”