telaxman wrote: every single extended return should not have a balance owed, otherwise there will be a late payment penalty.
That's not true. There's 10% leeway. 90% of total tax has to be paid in to avoid late paying penalty. How often can you be underestimating by more than 10%?
The majority of my extensions are returns I have all or most of the info so a fairly accurate estimate can be made. Many extended returns are taxpayers making quarterly estimated tax payments. The first quarter estimated tax payment is added to the extension payment giving a fairly substantial cushion.
For returns I don't have the info, if my estimate is off, it's usually because the late info shows substantially higher income than past years and the client is informed they will receive a penalty letter.