Form 7004 (F-7004) is used typically by businesses, corporations, partnerships and trusts (basically non-individual entities) to extend the time for filing returns. This is done in an eventuality where the entity is unable to meet the tax filing deadline. The extension period is typically a maximum of up to 6 months.
There are certain mandatory requirements which need to be adhered to while applying for time extension for filing tax returns using F-7004:
- F-7004 is purely an application seeking extension of time to file the tax returns; it should not be construed as an extension for the payment of taxes due.
- The entity can pay either a part or full or none of the estimated tax amount, if not paid at all, interest and penalties on overdue tax payments will accrue.
The time extension for filing returns can be e-filed for the following forms:
- Section 4951 taxes such as 1041-QFT, 1041-N, 1042, 1120, 1120-H, 1120-L, 1120-ND, 1120-ND, etc.
- Estate – 990-C, 1041;
- Trust – 1041, 1120-POL, 1120-PC, 1120-RIC, 1120-REIT, 1120S, 1120-SF, 1120-C, 3520-A, 8804 and 706-GS(T)
You can pay either by credit card or an electronic cheque via the FileLater business extension system.
Once the application has been submitted for extension, IRS will send an intimation only in case of a reject in the extension sought. It is a negative confirmation, if there is no intimation it is to be construed as accepted.
F-7004 has been three parts to it. The selection of part 1 or part 2 is dependent on the type of extension being sought. Part 3 is mandatory for all the users.
The steps to fill out F-7004 are enlisted below:
- Download a copy of the F-7004 from the IRS website http://www.irs.gov/pub/irs-pdf/i7004.pdf. The name of the form is "Application for Automatic 6-Month Extension of Time to File Certain Business Income Tax, Information and Other Returns."
- Fill the prerequisite details, e.g. company name, address and tax identification number.
- It is mandatory to enter your form code, which is dependent on the type of tax you wish to file for. Carefully review the instructions to identify and locate the form code that is applicable for your return.
- Mention clearly which tax year you are filing the F-7004 for. Enter the estimated ‘total tax’ for which your company is liable. Please note this is mandatory and as explained earlier, the extension is for filing of returns and not payment of the income tax.
- Provide as much details as possible on the tax that has been paid by you throughout the particular year for which you are filing an extension.
- After filling out the form and the requisite details, for your own records check if you are due for refund or owe more tax, by checking the difference of your estimated tax amount and the amount already paid throughout the year.
Word of caution: Although the F-7004 is relatively simple to use and easy to populate, ensure that all information provided is accurate (especially the amount of tax and the calculation for the same). This in fact is true for all tax related information which is given to the IRS. Any information which is not accurate and is incomplete will only lead to a lot of queries which not only will be unpleasant but will catch the eye of the IRS, in a way which you would want to avoid at all costs!