Extension, but still filing late

[Black Bart]

1040 client got extension until Oct. 15th, but won't be able to file in time. After the extension expires does the 5% per month late filing penalty revert back to April 16th (making him five months late on 10-16) or does IRS figure the late penalty beginning from Oct. 16th?

Thanx for any help.

BB

[JohnH]

Hi Bart.
The monthly 5% FTF penalty begins Oct 16.
It runs at 5% per month until the return is filed, with a max of 25%.

The monthly 0.5% FTP penalty and interest revert back to Apr 15, but that would have been the case even if the return is filed by Oct 15.
Same for estimated tax penalty, if applicable.

[buzzardbreath]

Good to have you back

Welcome back Bart. the 5% FTF penalty begins October 15th, IF the taxpayer has filed an extension.

Otherwise it begins April 15th, and taxpayer is considered to be a non-filer.

[mastertaxguy]

Is it better to beg for foregiveness rather than ask permission?

1040 client got extension until Oct. 15th, but won't be able to file in time. After the extension expires does the 5% per month late filing penalty revert back to April 16th (making him five months late on 10-16) or does IRS figure the late penalty beginning from Oct. 16th?

Thanx for any help.

BB

1. Is there a possibility you could file a return based on the information available and then amend later?
2. I suspect many of us have had to do this over the year. Don't like it, but if the issue is delayed reporting from a third party, it may be the best approach.
3. TP may know or should now actual funds received but if they are waiting on K-1's, for example, with distributable income not actually received, it may be best to estimate the taxable portions and have the client pay some additional tax.
4. Be sure to have client sign something acknowledging that return is filed/prepared based on the TP's information provided and that later receive information altering the return (requiring amendment) may result in additional taxes, interest and penalty and preparer fees.