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The IRS is making it even easier this year to obtain automatic four-month extensions to file individual income tax returns. This year, despite the instructions on the form, no signature is required to obtain automatic extensions. The IRS will process a taxpayer's Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, even if it is unsigned.

More importantly, the IRS is lifting the requirement to pay the balance due with the Form 4868 to obtain the extension. The taxpayer's ability to pay the balance due at the time of the extension request is no longer a requirement to obtain the extension.

This does not mean that there are no consequences for failing to pay any balance due by April 15. If there is a balance due on the return when filed, it will still accrue interest and possibly failure-to-pay penalties from the original filing date. But even here, the IRS is lightening up a bit. If the taxpayer pays 90% or more of the tax shown on the filed return on or before the original filing date, the IRS will not impose the failure-to-pay penalty.

Although not given as a reason for making this change, easing the rules for automatic extensions is clearly an important administrative contribution to the cause of easing workload compression. The IRS is holding hearings on this approach on May 8. If this change helps you and your clients this tax season, or if you have other suggestions for administrative methods to address workload compression, you should mail your comments by April 1 to CC:DOM: CORP:R (IA-41-93), room 5228, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington DC 20044.

Source: TD 8651, Fed. Reg. __ (1/4/96), containing Temp. and Prop. Reg. secs. 1.6081-4T and 301.6651-1T.

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