During tax season we receive a lot of calls from clients asking about progress on their tax return. As a general rule, we prepare returns on the basis of first in, first out. We maintain a list that shows the date information was received, who is preparing it, its status – received, in preparation, being reviewed, waiting for additional information and done. Partnership and Sub Chapter S returns are usually processed before individual returns as the March 15 deadline approaches since many partner’s returns maybe held up due to one partnership’s K-1s not being completed. C corporation and individual returns are due a month later, April 15th. Finally, returns on which we expect there to be a large balance due may receive higher priority than one on which we know there will be little or no tax liability.
On approximately the 25th of March each year we stop preparing returns and shift our focus to preparing extensions and first quarter estimated tax payments. Once all of our returns are extended, we revert to preparing returns until the due date. One study conducted at a nation firm indicated that approximately 85% of mistakes were made between March 20th and April 15th when staff get tired and client pressures mount. We prefer to avoid the pitfalls of this error-prone period entirely in favor of an extension and the time to do the job right.
Some clients express concern that extending their return will increase the chance of an IRS audit. In 40 years in the business, I’ve never heard of a return being pulled for an audit on account of its being extended. The last time I filed before April 15th I had a full head of hair and could almost see my abs; and I’ve never been audited.