Important things to know about IRS Form 7004

The IRS form 7004 is titled as “Application for Automatic Extension of time to file certain Business Income Tax Information, and Other Returns”. As the name suggests, the form is applicable for business entities who want to file a legitimate five or six month’s federal tax extension.

Following points comprehensively explain all that is required to be known about this form

Purpose

The extension will be permitted and held valid if the following criteria are met

•The entire form needs to be filled up properly without any ambiguity and scope for interpretation

•The estimation of tax, if applicable, has to be correct

•The Form needs to be filed within the due date and taxes owed also needs to be paid correctly

Determining extension period

One needs to check which Part number and Line number he falls under to judge his time eligibility

•5-month extension :  If it matches with part I, Line 1a of the form 7004 then one is eligible for a five month extension of time

•6-month Extension : if the type of return matches with those shown in Part II Line 1b then it is eligible for an automatic 6 month extension

One needs to go through line 2 and 4 as well before he chooses the exact extension period

Exceptions

As mentioned, Line 2 and 4 lists out the exceptions applicable and they are defined as follows

•Line 2: It is for foreign corporations that does not have an office or place of business in the United states

•Line 4: This one is applicable for foreign and selected domestic corporations and partnerships

Extension Termination

The IRS has every right to cancel the extension if it so considers. Although a termination notice will be mailed to that person or entity 10 days prior to the date of termination

How to fill

The form can be filled both online and offline. The online filing can be done from the official website of IRS at free of cost or it can also be done manually by collecting the form from the nearest IRS outpost or by taking a print of the same from the website. The form, once manually filled up, is to be sent back to the relevant IRS authority by mail. In any of these cases, no signature is required on the form.

Extension period notification

The IRS does not notify the applicant if the extension period has been already approved, it only does so in case the request has not been granted.

Payment of Tax

It is to be clearly understood that this form, very much like form 4868, does not create an extension for the tax payment it only creates an annexe to the period allowed for filing a return. Therefore, filling up this form also means filling up your tax amounts clearly.

It is also to be kept in notice that the IRS penalizes for both late filing of return and late payment of Tax. Late filing of return, though stands a limited chance of being waived off if it is supported by reasonable cause of action

Rounding off two dollars

The rule is clear for rounding off as it follows the standard approximation procedure where $1.49 is reported as $1 and $1.50 as $ 2.

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