Six Month Automatic Extensions Available for Most Taxpayers.

The new system provides smooth and basic procedures that are probable to save taxpayers between $73 million and $94 million, annually, by eliminating or consolidating several existing IRS forms. As a result, Beginning Jan. 1, most individuals and businesses will be able to request a full six-month tax-filing extension, without a reason or even a signature.

The new actions will replace the existing two-step process under which no corporate taxpayers could only get a six-month extension by first obtaining a tax extension, usually automatic, for part of that period and then requesting a discretionary tax extension for the remainder. A tax filing extension does not extend the tax-payment deadline.

"Some taxpayers need a full six months for irs tax extensions as the law provides. This change simplifies the process so they can make the request just once, not twice,” said IRS Commissioner Mark W. Everson.

Beginning with 2010 returns due in 2011, individuals will be able to use a single IRS form (Form 4868) to get an automatic six-month income tax extension of time to file. This will replace the existing two-step process under which an automatic 2010 tax extension was only allowed for four months, generally until Aug. 15. If more time was needed, a taxpayer had to explain why, using a second tax extension request form (Form 2688). About 6% of individual taxpayers request the initial four-month extension, and about a third of those go on to request a second extension, usually for two months until October 15. Form 2688 will be eliminated.

Income Tax Extension procedures will also be smooth for business taxpayers, thus eliminating three existing forms. Under existing procedures, only corporations can request an automatic six month tax filing extension. The new regulations will also make this option available to most no corporate business taxpayers, including partnerships and trusts.

Accordingly, starting Jan. 1, all eligible business taxpayers will use Form 7004 to request an automatic six-month extension of time to file. In the past, eligible noncorporate business taxpayers had to request an initial three-month extension and, if more time was needed, then request another three months.

Source: IRS.GOV