Joel Berry, CPA wrote:

- quote -

Actually, when you think about it, the only real risk is
that the IRS *might* assert the client didn't take the
necessary "reasonable steps" to estimate his/her tax
liability if the numbers are radically different. But the
best a preparer can do is work with what he/she has. Quite
often, the best guess may come from the prior year's tax
return.

--
Ed Zollars, CPA
Phoenix, Arizona

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"Nan Eklund" <naneklund[at]aol.com> wrote:

- quote -

I prepare extension requests based on the best information
available at the time. If my computation results in a
balance due, I ask my client if they want to send a payment
with the extension request; some do, some don't. Sometimes
the final return is close to the estimate, other times it
isn't. The important thing is that I document the source of
the information I use.

I believe this is both accurate and ethical. I've never had
a problem doing it this way.

Joel Berry, CPA
Sugar Land, Texas

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Nan Eklund wrote:

- quote -

The requirement under the regulations as they now exist is
that, for the taxpayer to have a valid extension, they must
simply estimate, to the best of their ability, the tax that
will be due. No longer does that amount need to be paid in
order to get the extension, and the first extension has no
requirement that there be a "valid" or "acceptable"
cause--it's automatic so long as you ask for it and estimate
the tax due.

So, based on those rules, I don't see any issue whatsoever
that is triggered by the fact pattern you've given.

--
Ed Zollars, CPA
Phoenix, Arizona

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Nan Eklund wrote:

- quote -

through the years I've managed to discourage extensions.
When someone DOES call about that time, I say bring
everything you have so far in, and if possible by April
14th, I'll either complete the return or prepare you an
extension, so that YOU CAN SEND them a CHECK!

Well, they might say, I have everything, just need an
extension of time to pay. No problem, I say. If we have
everything, you'll have your return. If some little thing
is missing, you'll still have the extension and if needed an
application for installment agreement (yes, even without
final amount).

But try as I may, still have 2 or 3 or 4.

What I hate is to have one of those additional extensions.
This year was the first of those in a really looonnng time.

I imagine maybe over the years that some people who always
want the extension might have gotten the message and gone
elsewhere. That's okay with me, too.

Cheer$,
Harlan Lunsford, EA in LA

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Nan Eklund <naneklund[at]aol.com> wrote:

- quote -

In terms of ethics, I suppose it is simply a question of
~reasonably~ doing your best with the information that is
available to you, time deadlines considered.

In my case, my stated procedures are that I make no
guarantees as to the acceptance of extensions or adequacy of
payments unless I receive COMPLETE information prior to
April 1st.

MTW

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I have a lot of long-time clients who call about April 10
and want an extension.

I can usually get their withholding and usually have a fair
idea that they won't owe, but I not REALLY certain.
Occasionally I'm fairly sure they WILL owe.

Is it ethical for me to send an extension when 1) I'm not
sure, or 2) I know darn well they'll owe but they are
procrastinators. I know the ethics of the 1040......but I've
never really thought through the extension process.

Nan, EA in LA

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