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GOODBYE, SECOND EXTENSIONS

November 07, 2005

The IRS on Friday announced new rules for extending returns. Under these rules, individuals, partnerships and trusts will get a single six mointh extension, starting with the upcoming filing season. Individuals had been allowed a four-month automatic extension, with an additional two months available "for cause." In practice, second extensions were seldom denied as long as the boilerplate explanation "additional time is needed to gather information required for a complete and accurate return" was used.

Proposed regulations for the new rules requested comments on whether pass-throughs - partnership and trusts - should have a shorter deadline. They should. It doesn't make sense to allow a partnership to extend its return to October 15 when individuals with October 15 deadlines need the partnership K-1s to complete their own returns.

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