Discussion:Does Extension Invalidate an Installment agreement

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Discussion Forum Index --> Advanced Tax Questions --> Does Extension Invalidate an Installment agreement


Discussion Forum Index --> Tax Questions --> Does Extension Invalidate an Installment agreement

Kbairtax (talk|edits) said:

13 April 2014
Does anyone know if filing an extension invalidates an installment agreement??? I have not spent a ton of time looking since we are at the 11th hours, so I am hoping someone knows FOR SURE.

Situation is husband died in Nov 2013. Wife has never handled the taxes. Currently in an installment agreement stemming from 2009 return. (that I think they don't really owe) 1099-C issued in husbands name ONLY and wife needs more time to gather info to determine insolvency. Will owe about $10,000 if we cannot get him insolvent for part of it. Debt was cancelled in Jan 2013.

She will be sending in about $2,000 with the extension.

Thanks in advance.

Tax Writer (talk|edits) said:

13 April 2014
No, an extension does not invalidate an installment agreement, however, several posters have mentioned that they had taxpayers receive notices after filing an extension that cancelled their installment agreement. This is probably an automatically generated notice, and it is an error. You should warn your client that this may occur. If it does, you will have to call and get the installment agreement reinstated. Not a big deal, just a hassle.

Kbairtax (talk|edits) said:

14 April 2014
Thanks Christy....that is what I was seeing but not from any reliable source.

I really appreciate it!!

Nightsnorkeler (talk|edits) said:

14 April 2014
I had a client get their IA cancelled when I filed their extended tax return in October with a balance due. They were informaed that if the tax was paid with the extension there would be no effect on the IA.

Don't have any substantial authority to back this up other than personal experience. But I am now informing any client with an IA and extension to be warned.

Kbairtax (talk|edits) said:

14 April 2014
Night.....In my case that should be okay. We plan to pay the balance due with the return in the next few weeks or month at most.

Nightsnorkeler (talk|edits) said:

14 April 2014
I had a client get their IA cancelled when I filed their extended tax return in October with a balance due.

Read again...if the tax is not paid with the extension IA can be terminated. Seen it happen first hand.

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