The IRS apparently caused a stir when it recently issued revised instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, that allows an automatic six-month filing extension for 2016 calendar-year C corporations.
In a brief notice posted to its website on Feb. 8, the IRS indicates that, yes indeed, the instructions are correct in allowing the six-month extension, even though Code Section 6081(b) provides for a five-month extension period.
“We have posted this article because the IRS wants to reassure the tax professional community that the information is correct in the Form 7004 instructions regarding the automatic six-month extension and explain that the reason it’s correct is Section 6081(a),” the IRS states.
Section 6081(a) allows the agency to grant a reasonable extension limited to six months.
In the past, calendar-year C corporations had to file Form 1120, US Corporation Income Tax Return, by the 15th day of the third month after the end of the tax year (March 15).
However, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changed the due date for filing Form 1120 to the 15th day of the fourth month after the end of the corporation’s tax year (April 15).
Thus, the extended filing deadline for calendar-year C corporations is Oct. 15 (Oct. 16 in 2017).
By the way, tax professionals should heed a cautionary note in the instructions: If Form 7004 is filed on paper but the tax return is filed electronically, the return may be processed before the extension is granted and may result in a penalty.