Filing Extensions

[Larmil]

Do you ever file extensions without the express consent of the client? A client I have had for years passed away a few weeks ago. I met with her daughter (who is executor) and she said Mom wanted me to take care of her taxes. Daughter lives in another state and I have been unable to contact her to finish the return. Do I have the right to file an extension even tho the exec did not actual request it? Mom owes money.

[DaveO]

I would file one. Daughter may be unaware of the need to or assume you are taking care of everything.

[Larmil]

I would file one. Daughter may be unaware of the need to or assume you are taking care of everything.

Thanks, I was going to. But I wondered if there was any reason I should not.

[JohnH]

Larmil: I agree. I can't think of a reason not to file an extension. Even if you later find the daughter changed her mind and somehow filed before Apr 15, the presence of an extension in the system has no consequence. I often file extensions for people to whom I have mailed returns during these last few days, just as a precaution against slow postal delivery or client's forgetfulness. I sometimes forget to even tell them I did that.

[Koss]

Factoids about Extensions

Prior to 1996, Form 4868 required the taxpayer's signature.

Here's a link to Form 4868 from 1995:

http://www.irs.gov/pub/irs-prior/f4868--1995.pdf

Beginning with 1996, the form no longer requires a signature. This suggests, but does not really prove, that there was some sort of conscious decision made by the Treasury Department, to make it possible for one person to file an extension on behalf of another, without all the baggage of a power of attorney...

I think a tax pro would have some exposure if they prepared and filed an extension with unrealistic figures on it, but that would be the case regardless of whether the client had consented to the extension.

I don't know whether there are any Treasury Regulations, or other guidance, on whether it is appropriate for one person to file an extension on behalf of another. Because the form does not require a signature, I'm not sure it really matters whether the person filing the form is a tax pro, or whether they are Circular 230 certified.

With some real mental gymnastics, I could come up with a scenario where it would be inappropriate for a tax pro to file an extension without the client's knowledge and consent. But the fact pattern presented in the original post isn't one of those scenarios.

It would have to be something really egregious, like, say... well, say you really lost your client's entire file, with no backup, before the return could be prepared, because it was in your briefcase, in the trunk of your car with a few other client files, and your car was stolen.

Well, s**t happens, and if you immediately tell your clients the truth, and offer to bear the cost of reconstructing their file, it might just work out okay...

But if you freak out, and lie to your clients, making up some other story about why the return isn't done, hoping that your car will turn up after some teenagers are done with their joyride, and file extensions for these clients without telling them what's really going on...

Well, let's just say that you might end up having a conversation with the accountancy board or the IRS Office of Professional Responsibility.

The flip side... (there's always a counterpoint somewhere)...

If the 15th is approaching, and you know the return can't be done on time, and you have enough data to complete a reasonable estimate for Form 4868, and you can't reach the client...

Well... an oral or written engagement agreement to do the return could arguably bring with it a fiduciary duty to file an extension to avoid the late filing penalty--precisely because no signature is required, and if the form is filed accurately, there can be no adverse impact. In fact... if you have the client's original documents, how could the client possibly file the extension on their own??

BMK

[Koss]

Further thoughts...

It is interesting to read the instructions for Form 4868 from 1995...

The form could be signed by anyone with a power of attorney...

Or, without a power of attorney, by a CPA, attorney, or EA...

Or by someone in a close business or personal relationship with the taxpayer, but only with an explanation as to why the taxpayer could not sign the form.

The more amusing question is...

Why on earth is Form 4868 for previous years even available on the IRS website??

LMAO



BMK