Daily Tax Update - February 16, 2006

IRS STREAMLINES PROCEDURES FOR BUSINESS TAXPAYERS TO OBTAIN FILING EXTENSION:
Today, the IRS announced that it has simplified the process for business taxpayers to file for an extension. The IRS stated that all business taxpayers who previously filed extension forms will now only need to file the revised Form 7004, "Application for Automatic 6-Month Extension of Time to File Certain Business Income Tax, Information, and Other Returns," to request an automatic extension of time to file. The revised Form 7004 grants taxpayers an automatic six-month extension without the need to file intervening forms.

  • According to the IRS, "For the 2005 filing season, business taxpayers must file Form 7004 by the due date of the return in order to receive an automatic six–month extension of time to file. The extension period is calculated from the due date of the return. New regulations make this option available to most non-corporate business taxpayers, including partnerships and trusts.
  • A similar change was also made recently for individual taxpayers. Individuals who need additional time to file their tax returns may request an automatic six-month extension by filing Form 4868.
  • The IRS reminded taxpayers, "An extension of time to file is not an extension of time to pay. Taxpayers will owe interest on any past due tax and may be subject to a late payment penalty if payment is not made by the due date of the return."
  • Additional information can be accessed here.   

TAX BILL INTRODUCED FEBRUARY 15:

  • H.R. 4756 sponsored by Rep. G.K. Butterfield (D-NC) would limit the agri-biodiesel credit to oils produced from plants and animals.
  • S. 2287 sponsored by Sen. Olympia Snowe (R-ME) would increase and permanently extend the expensing of certain depreciable business assets for small businesses.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read  more information on Steptoe's tax practice