Neil Sedaka sang that song back in 1962 and it is as true today as it was then. Breaking up, is hard to do. Which is why you seldom tell your dry cleaner that you have found someone else. You simply do not bring your clothes to them anymore and it is a good guess that they aren’t saying –
Where are Rick’s shirts?.
However, in the tax world, we do wonder where your shirts are. As we get closer to April 15th, we try to reach out to the clients we have not heard from. Some tell us they have changed accountants for a variety of reasons, others are grateful that we are on top of this and promise to send us information right away. Still, there are some we just cannot get in touch with. For these clients, we file an extension using the best information available.
What happens if no extension is filed? No extension can cause many negative tax issues. The biggest is penalties if you owe money. Not just small penalties, but significant penalties.
Other issues that may occur are elections that you made on your return can become invalid and retirement plan contributions can be disallowed. I think you get the picture.
Since we’re on the topic of extensions, what happens if we file an extension for someone who has filed their own extension or even filed their own return? Nothing happens. There is no downside for us filing an extension on behalf of someone even if they do not need it and only a downside if we don’t file one and they do need it.
At Hutchinson and Walter, we appreciate all of our clients and we understand that from time to time there will be a reason that you decide to find another CPA firm. We would really appreciate it if you took a few minutes and
Broke up with us.
Thanks for listening and I will talk at you again.