Extension necessary?

[Marge]

I am working on a return that I know will have refunds both federal and state. Because of fine tuning etc such things as NOL loss etc the Client has agreed not to push me. It was his fault that I am running late on this one.

The question: Do I really need to file an extension when there is a refund due?

Thanks for the help I am so shot today. Worked all weekend.

Marge

[Cathy]

Marge,

Extension isn't necessary when refunds are due...but I usually go ahead and do one just in case client later suddenly remembers he sold his lower 40 acres!

[JohnH]

Marge: I agree with Cathy. One never knows what unknowns are lurking out there. Even if you know there are refunds due on the return, one never knows what might turn up if the client is audited, and if the IRS subsequently finds tax due the return will be considered late-filed even if there was a refund showing on the original filing. A precautionary extension just removes all those potential headaches.

[Marge]

This guys bottom line is a loss of 119000.00 and I know he didn't sell the farm. But I will take your advice and file the extension.

Thank you very much

Marge

[mcb39]

Marge, file the extension. It only takes a couple of minutes and you have peace of mind. I had a client a few years ago that I knew was getting refunds on both Fed and WI and didn't bother with the extension. She got nailed with a late filing penalty.

[iratax]

There is one other reason to file the extension. There are some elections that can only be made on a timely filed return. A return on extension is considered timely filed while one not on extension is not considered timely filed. Do it just to protect your clients rights.

[GULFPORTCPA]

There is one other reason to file the extension. There are some elections that can only be made on a timely filed return. A return on extension is considered timely filed while one not on extension is not considered timely filed. Do it just to protect your clients rights.

Another 2 good reasons to file the extension.

1. I charge $50 per each and have been forever.

2. Charging for and sending out the extension bills also helps me to weed out undesirable new clients before more time is wasted on them. If they call and complain, I gladly write the bill off and bid them farewell.

[SCL]

There is one other reason to file the extension. There are some elections that can only be made on a timely filed return. A return on extension is considered timely filed while one not on extension is not considered timely filed. Do it just to protect your clients rights.

like the election to carryover the NOL - if it applies to your situation.