For various tax code purposes, continuously changing circumstances, and the high volume of tax returns prepared by this Firm, all Clients should expect to have extensions filed unless their tax returns are clearly prepared and filed prior to the original due dates but we may identify reasonable cause to still file extensions, even if your tax returns are ultimately expected to be filed by their original due date. By signing this Engagement, you agree to have extensions filed on your behalf with anticipated revenue agencies, without regard for when you may have supplied all required tax documents.
CP Hay wrote:"now couldn't use a direct debit"
What do you mean by that?
SumwunLost wrote:one might question whether or not a good-faith estimate of tax liability was made.
CornerstoneCPA wrote:SumwunLost wrote:one might question whether or not a good-faith estimate of tax liability was made.
In most cases, if we could make a good faith estimate of tax liability then an extension would not be required.
RazorbackCPA wrote:I've also noticed that when printing batch extensions our software (and prior software) used all zeroes. We could only create an extension with real tax, withholding, and payment figures if we did them one at a time. So we only do that if we are making payments, which are the only ones we have a real estimate of anyway.
SumwunLost wrote:I think you can make a good-faith estimate but be unable to finish up a return so that it is acceptable to the IRS computer. For instance, what if one is waiting on the HSA forms but has established that the client only used the account to pay eligible medical expenses? You know there is no impact on the liability, but you need the form to save the client from a needless notice.
ManVsTax wrote:I'd be worried that an extension containing all zeros would be invalid, as a valid extension should contain a good faith estimate of the tax liability.
If I don't have any numbers from the client or any docs, I use last year's data for the extension, as that's the best available given the circumstances. I'll then instruct the client to pay an estimate for the extension via Direct Pay if they feel they should. Their guess is as good as mine.
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