- 34 -
2688 and received the two extensions for a due date of
October 15, 1992. Petitioners’ return was stamped as received by
the IRS on October 22, 1992.
Specifically, respondent contends that petitioners failed to
file timely those returns because petitioners’ respective
applications for automatic extension for those years were
invalid; therefore, petitioners are liable for the addition to
tax of the full 25 percent.
A taxpayer’s application for automatic extension is not
valid if it does not comply with the requirements set forth in
section 1.6081-4(a), Income Tax Regs. One of the requirements
set forth in that section is that the application must show a
proper estimation of the taxpayer’s tax liability for the taxable
year. See sec. 1.6081-4(a)(4), Income Tax Regs. The failure to
estimate properly the final tax liability on Form 4868 can
invalidate the automatic extension and subject the taxpayer to an
addition to tax pursuant to section 6651(a)(1) for failure to
timely file the return. See Crocker v. Commissioner, 92 T.C.
899, 910 (1989). Nevertheless, the mere fact that petitioners
underestimated their income tax liability is insufficient to
conclude that the estimate was improper. See id. at 906.
A taxpayer will be treated as having “properly estimated”
his tax liability when he or she makes a bona fide and reasonable
estimate of his or her tax liability based on the information
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011