Most taxpayers can file for an automatic extension by submitting an electronic form or a paper Form 4868 (Form 7004 for businesses).
However, some taxpayers are not eligible for extensions. When you have an active tax debt with the IRS, one of the conditions of most agreements is to accrue no new tax debt. Filing and paying your current year taxes past the deadline can be seen by the IRS as a violation of your agreement.
If you were approved for an Offer in Compromise, you must file by the April deadline during your five-year probationary period. If you do not file by the April deadline, the IRS can revoke your Offer in Compromise and reinstate the original amount owed.
If you have an existing installment agreement, you can request an extension on the deadline to file your tax return — but not an extension on the deadline to pay any tax debt from the current year. To protect your installment agreement, you will need to pay at least 90% of the estimated amount owed by the April tax deadline. Make sure you also request your extension to file before the April deadline (usually April 15) and file by the extension date (October 15).
Likewise, when you are Currently not Collectible, it is very important to comply with your tax filing requirements. The IRS can — and does — re-evaluate cases of hardship status on a regular basis. If you do not file or pay current year taxes on time, the IRS can revoke Currently not Collectible status and resume collection activities.
We can help you to file on time and protect your agreement with the IRS.