Instructions for IRS Form 7004

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Do you need to complete a business tax extension application, Form 7004? We have deciphered the IRS instructions to help you better understand the guidelines for requesting an extension. Don’t forget that you can quickly eFile Form 7004 online with an Authorized IRS e-file Provider like TaxExtension.com.

Form 7004 is called the “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns". This form consists of 3 main sections and can be used to apply for a 6-month business extension.

To be approved for a tax extension, you need to submit Form 7004 by the original due date of your return (usually March 15 for businesses). Note that the due date for some companies (C Corporations) is April 15 (the deadline for personal taxes). Keep in mind that this is not an extension of time to pay your taxes. If you have any taxes due, they must be paid by the original tax filing deadline. Be sure to enclose a check when you mail your Form 7004 if you estimate that your company will owe taxes. Keep in mind that if you eFile your tax extension, you can electronically pay your estimated taxes when you submit it to the IRS.

Here is a line-by-line guide for filling out IRS Form 7004:

Business Information

Enter the name of your business on Form 7004 as you entered it on the previous year's income tax return. The IRS will reject your business tax extension if the name you enter does not match the name they have in their database. They will also reject any extension request with an incorrect employer identification or other identifying numbers. Enter your applicable employer identification number (EIN) or social security number (SSN) and address. If your company mailing address has changed since you filed your last return, complete IRS Form 8822, Change of Address. Entering a new address on Form 7004 will not update your record with the IRS. 

Part I

Line 1

Enter the 2-digit “form code” that corresponds to the type of entity and tax return your company will file. You will find these codes listed on Form 7004. 

Part II

Line 2

Check the box on line 2 if you are a foreign corporation that does not have an office or place of business in the United States. 

Line 3

Check this box if you are requesting an extension for a corporation that is the common parent of a group filing a consolidated return. You will need to attach a list of the group’s members and include their names, addresses, and EINs (Employer Identification Numbers). For specific guidelines regarding the list format, see the IRS Instructions for Form 7004.

As a general rule, the parent corporation and its consolidated group members must all use the same taxable year. Additionally, if all members of the affiliated group are not correctly listed, the entire group may forfeit its ability to elect to file a consolidated return.

Line 4

Check this box if the organization requesting an extension is a corporation or partnership that qualifies under IRS Regulations (section 1.6081-5). These include foreign corporations with an office or place of business located in the U.S., as well as domestic corporations that:

• Conduct business and maintain books/records outside of the U.S. and Puerto Rico, or

• Earn their principal income from sources within the U.S.

Under Regulations section 1.6081-5, these types of corporations are automatically given an extra three months to file AND pay their taxes. You do not need to submit Form 7004 for this 3-month extension, which moves the deadline to the 15th day of the 6th month following the end of the tax year. Attach a statement explaining why the corporation is eligible for an extension to file and pay. Note that Form 7004 can be submitted to request an additional 3-month extension beyond that (be sure to check the box on Line 4).

There is another exception for certain partnerships that maintain their books/records outside of the U.S. and Puerto Rico. These types of partnerships are automatically allowed an extra two months to file AND pay their taxes. You do not need to submit Form 7004 for this 2-month extension. Attach a statement explaining why the partnership is eligible for an extension to file and pay. Note that Form 7004 can be submitted to request an additional extension (3 months for Form 1065 filers, and four months for Form 1065-B filers), remember to check the box on Line 4.

Line 5

If you don’t file based on the calendar year, enter the appropriate tax year beginning and ending dates.

Line 5b

If you have a short tax year, check the appropriate box for the reason that applies to you. The options listed are Initial return, Final return, Change in the accounting period, and Consolidated return to be filed. If none of these reasons apply, check the box for “Other” and attach a statement that clearly explains the circumstances that caused the short tax year.

Line 6

On this line, enter the total tentative tax that the business expects to owe the IRS, including nonrefundable credits. Enter -0- if you expect the amount to be zero.

Line 7

On this line, enter the business total payments and refundable credits. The term “payments” generally refers to estimated tax payments that you may have made during the year.

Line 8

Subtract Line 7 from Line 6 to arrive at the “balance due,” which is the amount of tax owed by the business for that year. Remember that a tax extension only gives you more time to file your return. The amount shown on Line 8 must still be paid by the original return deadline. If you electronically file Form 7004, you can also make an electronic tax payment to settle your outstanding balance. At TaxExtension.com, you can eFile Form 7004 online and submit your tax payment via EFW (electronic funds withdrawal) directly from your bank account. It really could not be any easier!

If you have any questions, our helpful support team is here to guide you. E-file your business tax extension today