Extension Deadline Missed

[erchess]

New client did extension and as far as I know it was valid. However he missed the deadline and I have an appointment to at least begin his return on Thursday. He may or may not have everything I need at that point. He will almost surely owe. What penalties is he looking at?

[Kram BergGold]

?

A 2007 extension is valid till Oct 15. What is the issue?

[JohnH]

If it's an S corp then he will owe $85 per month per shareholder, up to 12 months on the Fed return (beginning Sep 15), and the NC extension is valid until Oct 15.

If it's an individual, he still has until Oct 15 to file.

All the above is assuming the extension was valid.

[geekgirldany]

I've got one with a S-Corp that never came to pick up their information to have their returns prepared by another accountant. I called two weeks before and told them to pick up the information to have someone else to prepare it. Told them about the penalities. They never came. I am now going to send them a certified letter. Because of various reasons I will not prepare the returns.

[erchess]

Thank You All

He was the one who told me the deadline is past. Here's hoping he is wrong and that it isn't his 2006 return I will be starting on Thursday.

[JohnH]

Well, if it's his 2006 return then he's looking at a 25% FTF penalty, a 6% APR FTP penalty, and 8% APR interest on the unpaid balance, going back to Apr 15. The actual amounts are slightly less because there's some offsetting when the FTF penalty maxes out, but the above numbers are close enough. He will probably also be looking at an estimated tax penalty.

[erchess]

Actually John

I don't think 06 can have an estimated tax penalty for him because in 05 he had very little income. He was a college student and then a homeless day laborer for a while. Then from somewhere he obtained a job (straight commission) in 06 selling high end homes in a development. He was a contractor and he made so much money that he bought a Lexus and a home in that subdivision without credit. He did that I believe into 07 and then even in these parts the housing market went bad and he has taken a W-2 job as the manager of a business that provides home handymen to people who need them.