Advice For Those Who Didn’t File An Extension on July 15, 2020

The IRS cautions taxpayers who missed the July 15 tax deadline and didn't request an extension, to file as soon as possible to reduce potential penalties. e-Filing returns can help expedite the process.

An extension to file is not an extension to pay; penalties and interest will apply to taxes owed after July 15.  

A taxpayer will usually qualify for relief if they qualify for First -Time Penalty Abatement or where they have reasonable cause for filing late.

1.     First-Time Penalty Abatement (FTA) - Generally, an FTA can provide penalty relief if the taxpayer has not previously been required to file a return or has no prior penalties (except the estimated tax penalty) for the preceding three years with respect to the same IRS File (IRM §20.1.1.3.6.1). or

2.     Reasonable Cause Defense - Under Section 6038 of the tax code, which lays out the information reporting requirements for individuals and businesses with an interest in foreign corporations and the penalties for delinquent filing, penalties may be abated if a reasonable cause exists for the failure to file. However, neither the statute nor the applicable regulations define a reasonable cause standard for the abatement. Treasury Regulations Section 301.6651-1(c) provide a definition of what constitutes reasonable cause for failure to file corporate income tax returns and says that "if the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to reasonable cause." 

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