Probable IRS Systemic Issue with Individuals Taking the Automatic Two-Month Extension

If you read my previous post, you will see that I mailed in an Appeal today regarding a client who took the automatic two-month extension for being outside of the country on April 15th. To date, an extremely high percentage of my clients who were outside of the US on April 15th but who file with US addresses have been assessed the Failure to File penalty and/or the Failure to Pay penalty. In all cases the taxpayer either filed by June 17th or filed an extension with full payment by June 17th (and included the required statement with his return).

I would appreciate it if other tax professionals who have seen this issue correspond with me (or comment to this post). I have submitted this issue through the IRS’s Systemic Advocacy Management System (SAMS). I am also working with my practitioner liaison at the IRS in trying to resolve this issue. I have a large number of clients who file in this manner; many tax professionals will have just one such client. We’re trying to determine how big of an issue this is (we suspect it is impacting almost all such returns). Thus, the request for assistance from the tax professional community.

You can email me at rcfox [at] claytontax [dot] com.

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