Extensions Available for Those
Who Can't Make the Deadline

WASHINGTON - The Internal Revenue Service has already received half of the 114 million tax returns it expects this year. With April 15th just three weeks away, some of the remaining taxpayers may be thinking about getting more time to file. The IRS anticipates receiving five million extension requests, as it has the last two years.

To obtain the extra time, people must file Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return," by midnight, April 15, and include any expected balance due. This gives them until August 15 to file the return. No reason must be given for the extension.

The IRS cautioned that this filing extension does not give extra time to pay the tax due. Taxpayers must make a reasonable estimate of their total tax liability and pay any balance due, or the automatic extension will not be granted.

Interest is charged on any additional tax owed when the return is finally filed. In April, that interest rate drops to eight percent per year, compounded daily. There is also a late payment penalty of one-half percent per month if less than 90 percent of the total tax is paid by the deadline. The penalty for filing late without an extension is 5 percent per month of the balance due. For returns over 60 days late, the minimum penalty is $100 or the full balance due, whichever is less.

Form 4868 is available at most IRS offices and by calling -- toll-free -- 1-800-TAX-FORM (1-800-829-3676).

The IRS had intended to replace Form 4868 this year with paperless automatic extension rule, known as APEX (Automated Processing of EXtensions). However, in response to concerns raised by various tax professionals, IRS said last August that it was reconsidering APEX. No decision has yet been made on the APEX proposal.

As of March 20, the IRS had received 57 million tax returns and sent 36 million refunds, worth $35.6 billion. At $980, the average refund is up 9.5 percent from this time last year.

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