IRS Announces 6-month extensions in 2006

For clients coming in three years from now, lawyers must be careful in identifying the start date for the 3-year period under §507(a)(8)(A) for purposes of dischargeabity of income taxes. The IRS recently announced that most taxpayers will be able to request an automatic, six-month tax-filing extension for most common individual and business returns. Beginning January 1, 2006 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 streamlined and simplified procedures are expected to save taxpayers between $73 million and $94 million annually, by eliminating or consolidating several existing IRS forms.