CAN YOU EXTEND A TAX EXTENSION?

Can You Extend a Tax Extension?

     I am sorry Virginia. But while there may be a Santa Claus, he is not operating between 15 September and 15 October when most business and personal income tax return extensions are up. There is no extending an extension. If you do not file on time, the next day Failure to File Penalties begin. 

Supposing I cannot pay the tax? What do I do? 

File the tax return!

      The debt will be assessed and you will receive a letter from the IRS. You will avoid the steep "Failed to File on Time" Penalty, and can work out some handling for the debt. There are solutions to IRS debts, such as an Installment Agreement (monthly payment), an Offer-In-Compromise (where the IRS agrees to accept a lesser payment as payment in full) and Currently Not Collectible status (where the IRS agrees you cannot afford to pay anything, ceases all enforced collection activities, and closes your file until your income improves). 

But these all come into play AFTER the return is filed and are based on the amount of tax owed. If you do not file the return, the amount owed goes up each month with more penalties assessed. So filing the return is the right action, even if you can't pay it.

Great. I know I need to file my tax return, but my records are missing or incomplete. What do I do?

     Well, if your records are still incomplete at this late date, then you probably need to do something different. The most common reason records are incomplete are: 

? the taxpayer thinks someone else is doing it,

? the taxpayer is busy doing everything else, or

? the taxpayer does not know how to do it. 

As the final tax deadlines approach, the first step to resolving your taxes without incurring penalties may be to realize you need help.

      Handling: Forms such as W-2s and 1099s and other tax relevant forms can be gotten from the IRS. An Enrolled Agent (EA) can get this data from the IRS and use these to file your tax return. All you need to do is sign form 2848 IRS POWER OF ATTORNEY naming the EA as your representative and the IRS will give him all the data they have. If you are an employee and not running your own business, this may be all we need to file your tax return. 

      If you have your own business or income reported on form 1099. this may not be enough. The IRS may not have full records of your income, and they also do not have records of your expenses. In this situation your “ Profit and Loss” may need to be calculated. Often this can be calculated from bank accounts. True tax professionals know how to do these things, and can do them for you in a fraction of the time you might take.

What next? 

      Call Torchlight Tax and Financial Solutions for a free consultation toll free at

 1 (877) 758 7797. We can assist you in tax preparation, get IRS transcripts needed for this purpose, or even construct a "Profit and Loss" out of bank statements. We are happy to help.