September 15 is Worse Than April 15

After being a tax CPA for over 30 years, I always get questions about how tough April 15 must be for us tax preparers.  April 15 is tough; however, I believe that September 15 and October 15 are much tougher.  September 15 is the deadline for calendar year extensions for all business returns plus trust tax returns.  October 15 is the final due date for calendar year individuals.

Most people who file by April 15 have their information in good order and although it is a rush, we are used to the process at point and are very efficient.  Most people who wait to file on September 15 or October 15 are, shall we say, not quite so efficient with their record keeping and thus, it is much tougher for us to get information and to get the tax return done.

For example, from Friday to this morning, I have already received 6 new tax returns (that I will get done by tomorrow).  I know some firms will tell their clients that if the return data is not in the door at least a month before the due date, it will not get done.  I try to tell my clients this; however, I seem to be a good “enabler” and still get the return done.

If you don’t file your return by tomorrow for S corporations and partnerships, the penalty will be $195 per month per k1.  If you are a partnership with less than 10 individual partners and all of the partners timely file the partnership information on their tax return, it is likely you can write a letter to the IRS and get out of the penalty.  It is much tougher for S corporations.  You must have reasonable cause (the dog ate my homework does not work); however, the first-time abate program offered by the IRS may get you out of it too.  The IRS offers to abate any late filing penalty if you have not been late in the last three years.  They do not promote this option and you need to specifically ask for it.  I have taken advantage of it many times when nothing else has worked.

If you are still working on filing your business return, good luck.  You have today and tomorrow to finalize it.

Paul Neiffer, CPA