September marks the “second tax season” for many CPAs in public practice. As September 15th looms overhead, we find that all the extensions for corporations, partnerships and certain trusts with December 31 accounting year ends are coming due. It has been good to enjoy the breathing room after April 15th, but now those pesky little returns are due. Some will come from clients who simply procrastinate. Others may be waiting on other developments outside our control (i.e. a K-1 from another CPA). Some of the work may be extended to accommodate the CPA return preparer. Regardless of the reason, the drop dead date is now just around the corner.
Extensions are a handy tool to spread the work and release some stress during the traditional “Tax Season”. Some clients use the extension to delay collection of tax (a paper free loan from Uncle Sam and the Governor), knowing that the penalties and interest may be less than what is charged by lending institutions. If a client is under an IRS audit, it is customary to extend the current return as long as possible. And some taxpayers may want to extend elections that parallel the due date of the tax return, including extensions (i.e. payment of certain retirement plan liabilities). While the statute of limitations is also extended, most taxpayers find extensions an ideal planning tool.
So we tax practitioners may be burying our heads into our tax software over the next two weeks. Wish us the best!
Just after Tax Season II comes that mini-rush to October 15th as individuals on extension will be right on the heels of this busy spell. All too often clients think that tax accountants only work 3 and ½ months out of the year. Oh…I wish!
Blogger: Charles ‘Eddie’ Brown, CPA