IRS Notice to Practicionaires - No "Zero" Extension Form 4868 - Spidell

IRS Notice to Practicionaires – No "Zero" Extension Form 4868

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Message Board IRS Notice to Practicionaires – No "Zero" Extension Form 4868

This topic contains 5 replies, has 3 voices, and was last updated by Lynn Freer 2 months, 1 week ago.

  • Author
  • #169095
    Miklos Ringbauer


    I am looking for your help with the following matter: in 2017 IRS sent out a notice that we practitioners would get a penalty if Form 4868 is submitted with “Zeros” on it, and we would not do the due diligence of calculating balances.

    I know that general instructions say that you must calculate, but in the past it has been a “practice of some tax preparers” filing these “Zero” Extension forms.

    Would anyone have that IRS Notice that they are “now cracking down on these types of filing”?

    Your help is greatly appreciated!


  • #169163
    Lynn Freer

    I don’t know for sure if IRS is cracking down. I have never used a zero extension unless it really is zeero but a return needs to be filed. I recall a 1031 case that was denied because the 180 days was after 4/15 and the t/p was disallowed the exchange because no valid extension was filed. An extension that is not valid if must have a good faith estimate.

  • #169276
    Lynn Freer

    Could you give me the number on the notice and maybe fax a copy to 714-776-9906 attn: Lynn Freer. I’m going to find out of IRS anticipates audits of practitioners’ extensions.

  • #169464
    Mark Bole

    There was no such IRS notice.  There is no penalty to either taxpayer or preparer for filing an extension with zero estimated liability. Think about it: the extension is not signed, and on an efiled extension, only the EFIN is included, which does not identify the paid preparer. On a paper filed extension, obviously there is no identification at all.  So how could the IRS assess a preparer penalty?

    Worst case, IRS might disallow the extension and charge FTF penalty on the taxpayer (only) when a reasonable effort to estimate tax liability on the extension was not made. This is not new.  Note that actually making an extension payment is a separate issue, which would only have an effect on FTP penalty.

  • #171328
    Mark Bole

    Spidell addressed this topic in a recent California Minute recording.  I found it very unfortunate that they kept on using the term “zero balance due” extension, over and over, when the balance due, and payments made, have very little to do with the extension and FTF penalties.  What matters is that the tax liability has been reasonably estimated, and any time the liability is more than zero, it is probably a good idea to file the extension.  Almost every where the podcast used the term “zero balance due” I would replace with “zero liability”.


  • #171378
    Lynn Freer

    First, even if there is no tax due, an extension is necessary if certain elections must be made on a timely filed return. I believe the zero balance refers to extensions which show the tax due as the amount of withholding and the withholding zeros it out.