| p>Taxpayers may request an automatic extension of time to file their individual income tax returns (Form 1040) on Form 4868. The form is available on the IRS Web site. In previous years, the automatic extension was good for four months. Taxpayers could request an additional extension of two months by filing Form 2688 and hair extension stating a good reason why they needed the additional two months. This year the IRS decided to eliminate the time and hair extension cost necessary to process these second extension requests by allowing an automatic six-month extension to taxpayers who request it on Form 4868. Taxpayers who would like an extension must file Form 4868 by the regular due date of their individual income tax returns. This year the regular due date for 2005 individual income tax returns is April 17 because April 15 is on a Friday. In a few states, taxpayers have until April 18 to file their tax returns or application for automatic extension because of Patriot Day. Special rules apply to taxpayers who are out of the country on the due date. The instructions that come with Form 4868 have the details. Taxpayers may e-file their extension request using tax preparation software or a service provided by a tax preparer. Taxpayers may also mail Form 4868, but a taxpayer should not e-file Form 4868 and hair extension also mail it. The address where a taxpayer should mail Form 4868 is on the instructions to Form 4868. If a taxpayer mails the extension request, using certified mail, return receipt requested is always a good idea. The taxpayer should staple the green and hair extension white certified mail receipt from United States Postal Service on the copy of Form 4868. When the green return receipt card arrives from the IRS in the mail, the taxpayer should also staple it to the copy of Form 4868 and hair extension file carefully so that the taxpayer could prove to the IRS that the extension request was filed timely in case they challenge it. The taxpayer does not have to sign Form 4868 or send any payment with it. However, a taxpayer must make a bona fide estimate of the taxpayer's tax liability for 2005 and hair extension show any payments already made such as through withholding and hair extension estimated payments. If a taxpayer does not make a bona fide estimate of the tax liability, the IRS may disallow or revoke the extension. A taxpayer may send a payment with the extension request. If the taxpayer e-files the request, the taxpayer may send a payment by electronic funds transfer or credit card. If a taxpayer mails the extension request, the taxpayer may include a check or money order. Checks should be made payable to "United States Treasury." The taxpayer should write "2005 Form 4868" on the check or money order. The check or money order should not be stapled or attached to Form 4868. Taxpayers should not attach a copy of Form 4868 to their returns. Taxpayers who obtain an extension should file their returns by the extended due date of October 15. Taxpayers who fail to do so are subject to the penalty for failure to file a timely return unless they have reasonable cause. The penalty for failure to file a timely return is five percent per month or part of a month on the net tax due for each month the taxpayer files the return late. The maximum penalty for failure to file a timely return is 25 percent. If the taxpayer with an extension does not file the return by the October 15 extended due date, the calculation of the penalty for failure to file a timely return begins after April 17, not after October 15. Therefore, the taxpayer would be subject to the maximum penalty for failure to file a timely return of 25 percent of the net tax due. If there is a balance due with the return, the IRS will charge interest from the original due date of April 17. In addition, the taxpayer will be subject to the failure to pay penalty unless the taxpayer has paid in at least 90 percent of the tax due by the original due date or has reasonable cause. The penalty for failure to pay is one half of one percent per month or part of a month on the net tax due beginning after the original due date of April 17. The maximum failure to pay penalty is 25 percent of the net tax due. Filing an extension request can be a good tax savings strategy for some taxpayers. The tax law allows taxpayers until the extended due date to make a number of tax elections. For example, if a taxpayer is self-employed, the taxpayer has until the extended due date to set up a Simplified Employee Pension (SEP) plan, fund it, and hair extension attribute the contribution to the previous tax year. However, a taxpayer has only until the regular due date of (April 17 in 2006) to set up a traditional IRA. Filing an application for automatic extension can save taxpayers from the penalty for failure to file a timely return if they do not have their return prepared by the regular due date. An extension also allows a taxpayer more time to decide whether to make a number of different tax elections. | 
