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How Long Are Corporate Extensions? February 26, 2017

How Long Are Corporate Extensions? The Code Says Five Months, but the IRS Says Six Months! Hurray!

The IRS has reassured the public that it knows what it is talking about in the 2016 instructions for Form 7004. Apparently, the IRS has been getting inquiries from preparers who are wondering if the instructions for Form 7004 are correct. The instructions indicate that the automatic extension period for corporations is six months, while §6081(b) states that the extension period for corporations is five months. The IRS explained that they were relying upon §6081(a) for the authority to grant six-month extensions, rather than the five-month extension period specified in §6081(b). For more information see the IRS notice here.

This really isn’t new. Prior to 2016, §6081(b) stated that corporations had a three-month extension period, but the IRS had been granting corporations a six-month automatic extension for years.

Due dates have changed! Calendar-year partnership returns, which were previously due Apr. 15, are now due by Mar. 15. Calendar-year C corporation returns, which were previously due Mar. 15, are now due by Apr. 15. S corporation returns remain due on Mar. 15. The underlying rationale is to have “flow-through” returns like Forms 1065 and 1120S due a month before the underlying returns where the K-1s will be reported. Note. A 2016 calendar-year C corporation return is due Apr. 18, 2017 and may be extended to Oct. 16, 2017. A 2016 S corporation return is due Mar. 15, 2017 and may be extended to Sep. 15, 2017.

Vern Hoven, CPA, MT, is one of America’s premier tax presenters and speaks to over 100 groups a year on a variety of tax topics. He teaches at Western CPE Federal Tax Update seminars and conferences and produces self-study and webcasts courses as well. Vern consistently receives outstanding evaluations and has won numerous teaching awards, including the prestigious AICPA 2014 Sidney Kess Award for Excellence in Continuing Education.
Vern is the author of the best-selling Real Estate Investor’s Tax Guide and a favorite interviewee on radio, television, and in newspapers. His presentation skills have earned him the coveted Certified Speaking Professional (CSP) designation from the National Speakers Association, which has granted only 400 CSPs out of 3,600 NSA members as of 2006.
Vern practiced in the public, governmental, and corporate accounting fields before starting his own public accounting practice in 1973, a firm that grew to one of the largest in western Montana. In 1985, he started his present tax consulting practice. CPA Magazine recognized Vern as one of the top 50 IRS representation practitioners in 2008.

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