Tax filing time is here for Americans. Due date is October 15 for those on extension and many people are panicking. Despite the shutdown of certain IRS operation, the IRS has made clear that the Oct 15 due date is still in effect and people must still file timely. You can read more from the IRS about the effect of the lapse in appropriations here. Taxpayers should continue to file and pay taxes as they would under normal government operations. Individuals who requested an extension of time to file should still file their returns by Oct. 15, 2013 either electronically or on paper. The processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them. Tax refunds will not be issued until normal government operations resume.
What happens if the overseas filer still cannot get his return in on time? They are sometimes allowed an additional extension beyond October 15, discussed more fully below.
Additional Extension of Time for Taxpayers Out of the Country
Taxpayers who are out of the USA can request a discretionary 2-month additional extension of time to file their returns (that is, returns are due by December 15 for calendar year taxpayers).
To request this extension, you must send the Internal Revenue Service a letter explaining the reasons why you need the additional 2 months. Send the letter no later than the extended due date (October 15 for calendar year taxpayers) to the following address:Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0045 USA
You will not receive any notification from the Internal Revenue Service unless your request is denied. Since the IRS can possibly deny the request, you should make the request as early as you can so you will have time to do your return in the event permission is denied. Given the complexity of tax returns for overseas Americans, especially with new Form 8938 and the very harsh penalties that can apply for improper reporting of overseas accounts and assets, many taxpayers are seeking professional advice. Tax return preparers are on overload and cannot get all the returns done by October 15th. This may be a good reason to explain your request for additional time.
The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350. Form 2350 is a special extension to help an overseas American meet the Physical Presence or so-called “Bona Fide Residence” (BFR) Test. The first year overseas, it is common that the overseas American cannot meet the BFR test because the person has not been living in the foreign country for an uninterrupted period which includes a full calendar year. For such first year, the taxpayer might plan to satisfy the “physical presence” test to maximize the exclusion, or apply for an extension of time to file using Form 2350 until the taxpayer has stayed in the foreign country for a full calendar year in the following year.