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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Hi. I have a C-Corp with fiscal year ending June 30. I filed

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Hi. I have a C-Corp with fiscal year ending June 30. I filed form 7004 for an automatic extension for filing my Form 1020. The form was mailed and postmarked October 15th. I just received a notice from the IRS that my request was denied because my "application was filed after the date my return was due." The notice included a stamped copy of my 7004, noting it was *received* on Oct 17. So where is the problem? Why did they deny my request? and what can I do about this?

Lev :

Hi and welcome to our site!
According to instructions - Form 7004 must be filed on or before the due date of the applicable tax return.
The due date of the C-corporation returns is
the 15th day of the 3rd month after the end of its tax year.
Because the IRS received the form 7004 after Apr 15 - they denied the request.
I suggest to contact the IRS and point out that your request was timely postmarked - and provide a copy of your receipt from the post office.




Customer:

my fiscal year ends Juen 30

Customer:

*June

Customer:

so my deadline was Oct 15th

Customer:

not Apr 15

Lev :

Yes - that what I meant - sorry for typo - because the IRS received the form 7004 after Oct 15 - they denied the request.

Customer:

isn't the deadline postmarked by, not received by??

Customer:

"filed by"

Lev :

The IRS has no information when you mailed your request - and they base their processing on the date they received. But you do have a case - and may contact the IRS with your proof.

Customer:

don't they have the postmark on the envelope? I thought that's how it works for regular personal returns

Customer:

I didn't mail it certified or return receipt

Lev :

Not all envelops have dated postmark. If you do not have a proof - it would be harder to argue with the IRS.
But still you may contact them asking to verify the date on the envelop they received.

Customer:

ok, I'll try calling the 800 number on the response

Customer:

one more question

Customer:

I didn't have any tax liability this year

Customer:

so is there any penalty if I don't file until later anyway?

Lev :

The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $135.
So - if you will not be able to convince the IRS to accept your extension - you will have 60 days to avoid penalty.

Customer:

smaller or greater of? because the smaller of $0 (tax due) and $135 is $0

Lev :

Page 5 in instructions - see page 5 left column - http://www.irs.gov/pub/irs-pdf/i1120.pdf
it says "smaller"

Customer:

ok, so seems like that would be $0 in my case.

Customer:

Do I lose my ability to carry forward losses if my return is late?

Lev :

Filing late would not affect you ability to claim NOL - net operating loss.

Customer:

so it seems like there isn't any adverse consequence in my case to filing late, regardless of whether they grant the extension?

Lev :

Depending on individual situations... I do not see anything that affects you - but you most likely wants to file as soon as possible to free yourself for other tasks.

Customer:

ok, thanks for the info

Lev and other Tax Specialists are ready to help you
You are welcome. Sorry for your situation. I would try to call the IRS and convince them - but if they do not have postmarked envelop - there is nothing you may do.