Tax extensions are becoming increasingly popular in the United States, for both individuals and businesses. Every year millions of taxpayers apply for extensions, giving them extra time to prepare and file their Federal income tax return. Many people are in the habit of getting a tax extension just in case, even if they do not require more time. The IRS will grant you 6 extra months to file your annual return (5 months for certain business entities), although your tax balance is still due by the original deadline.
A Tax Extension Increases Your Risk of Being Audited by the IRS — Myth or Reality?
Many people are misled to believe that there’s a direct relationship between tax extensions and tax auditing, or that a tax extension raises a red flag to the IRS. Luckily, that is incorrect. In fact, getting a tax extension can actually reduce your chances of facing an IRS audit.
While no one outside the IRS can say for sure how the audit selection process works, it is safe to say that a tax extension does not do anything to trigger an audit. Most tax professionals agree that there is a threshold/quota for auditing, but it tends to be filled by the time April tax season ends.
Applying for a tax extension will not make you a target for IRS auditing. The IRS makes it easy to request an extension because they don’t mind if you get one. With millions of people filing tax extensions each year, there’s no reason why you shouldn’t get an extension for yourself.
How Does the IRS Feel About Tax Extensions?
A lot of taxpayers want to know if the IRS hates when people file tax extensions. The answer is: NO. The IRS is very busy during tax season, so anything that lightens their load is fine with them. With a tax extension, you’re communicating to the IRS that you plan on filing after the April 15 (or March 15) deadline. As long as your tax balance is paid by the original due date, the IRS will leave you alone.
It’s clear that the IRS doesn’t care if you get a tax extension because they don’t even ask you for a reason when you apply. Also, Federal tax extensions are automatic — which means that anyone can get one as long as they submit their application properly and on time.
E-File Your Tax Extension for a Faster Response
E-filing is quickly becoming the most popular way to submit tax forms to the IRS. When you e-file your tax extension, you get a confirmation email as soon as the IRS approves your request. Make sure to use an Authorized IRS e-file Provider like TaxExtension.com so you know that your personal information is safe. At TaxExtension.com, customers experience quick turnaround and can also login any time to check the status of their extension.
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