If you are an American living abroad and sweating the October 15 tax filing deadline for your 2016 income tax returns, there is a possible piece of relief. You may be able to qualify for a further extension of time for filing your tax return — to December 15, 2017.
For American taxpayers living abroad, if you want to get a filing deadline of December 15, 2017 for your 2016 Form 1040, do this:
Everyone’s 2016 income tax return has a filing deadline of April 15, 2017. Internal Revenue Code Section 6072(a) says:
In the case of returns under section 6012, 6013, 6017, or 6031 (relating to income tax under subtitle A), returns made on the basis of the calendar year shall be filed on or before the 15th day of April following the close of the calendar year and returns made on the basis of a fiscal year shall be filed on or before the 15th day of the fourth month following the close of the fiscal year, except as otherwise provided in the following subsections of this section.
Human taxpayers–no matter where they live–are required to file income tax returns by the requirements of Internal Revenue Code Section 6012. That means the default filing deadline for human taxpayers filing income tax returns will always be April 15.
Americans living abroad (this means your normal home is outside the USA) have an automatic extension to file their income tax returns. They get an extra two months, hardwired into the Treasury Regulations. No work is needed, and no paperwork is required, per Treasury Regulations Section 1.6081-5(a)(5):
An extension of time for filing returns of income and for paying any tax shown on the return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of . . . United States citizens or residents whose tax homes and abodes, in a real and substantial sense, are outside the United States and Puerto Rico[.]
The sixth month after the closing of the tax year (December 31, 2016) is June. The fifteenth day of June is your deadline. You get this extension automatically if your tax home is outside the United States or Puerto Rico. Note that this automatic extension only applies to people who have their “tax home” outside the United States and Puerto Rico, or to military personnel posted outside the United States and Puerto Rico. If you are abroad temporarily (on vacation or for work), you do not get the automatic extension. The way you get this extension is simple. If you are filing your 2016 Form 1040 on or before June 15, 2017, all you need to do is write “Taxpayer Abroad” at the top of Page 1 of Form 1040 when you file it. The Instructions to Form 1040 give you this piece of information. If you do not believe the Instructions are trustworthy (and they sometimes are not), look at Treasury Regulations Section 1.6081-5(b)(1), which says:
In order to qualify for the extension under this section— (1) A statement must be attached to the return showing that the person for whom the return is made is a person described in paragraph (a) of this section[.]
You are claiming, because your true home is outside the United States and Puerto Rico, that you qualify for the automatic extension provided in Treasury Regulations Section 1.6081-5(a)(5). In this case, I would be pretty comfortable following the Instructions. Just write the magic words “Taxpayer Abroad” at the top of Form 1040, page 1. This, apparently, is all the IRS wants in order for you to assert that you are the kind of person who should qualify for the automatic extension. A paranoid person might write the words “Taxpayer Abroad” in big block letters using a red Sharpie. 🙂 This isn’t mandatory, but you do not get bonus points for being subtle. If you plan to file your 2016 income tax returns on or before June 15, 2017, stop here. No further reading is necessary.
Getting an extension of time to file a tax return is not the same as getting an extension of time to pay the tax due. Ordinarily, your tax return is due on April 15, and the IRS expects you to send in a check on or before April 15, 2017 to settle up any tax due for 2016. But Americans abroad not only get an automatic two month extension of time to file their 2016 income tax returns, they get a two month extension of time to pay their 2016 income tax liabilities. Again, look at Treasury Regulations Section 1.6081-5(a):
(a) An extension of time for filing returns of income and for paying any tax shown on the return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of—
Interest starts accruing from April 15, 2017 for any unpaid tax no matter what however.
Every human taxpayer, whether living in the USA or abroad, can use Form 4868 to get an extension of time to file tax returns. The extension is good for six months from the default filing deadline of April 15, 2017–not the June 15, 2017 deadline that applies to Americans abroad. That puts the filing deadline at October 15, 2017 for everyone—Americans abroad and at home. You get this extension to October 15, 2017 by filing Form 4868 before the filing deadline that applies to you. For an American living in the USA, the April 15, 2017 deadline applies and Form 4868 must be filed before April 15, 2017. Otherwise you’re too late in applying for an extension. For an American living abroad, your automatically extended filing deadline is June 15, 2017. You have to get your Form 4868 filed before June 15, 2017. But filing on or before June 15, 2017 doesn’t get you (the American living abroad) an extra six months. It only gets you four months of extension. From the instructions to Form 4868:
If, on the regular due date of your return, you’re out of the country and a U.S. citizen or resident, you’re allowed 2 extra months to file your return and pay any amount due without requesting an extension. Interest will still be charged, however, on payments made after the regular due date, without regard to the extension. For a calendar year return, this is June 15, 2017. File this form and be sure to check the box on line 8 if you need an additional 4 months to file your return.
The two month extension (to June 15) that applies to Americans abroad runs concurrently with the automatic six-month extension (to October 15) that applies to everyone. Because the IRS has been known to claim in Tax Court that its own Instructions are wrong, we again look to the Inspired Holy Writ. Treasury Regulations Section 1.6084-1(a) says:
An individual who is required to file an individual income tax return will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the individual files an application under this section in accordance with paragraph (b) of this section. In the case of an individual described in §1.6081-5(a)(5) or (6), the automatic 6-month extension will run concurrently with the extension of time to file granted pursuant to §1.6081-5.
An American living abroad is an “individual described in §1.6081-5(a)(5)” who gets the automatic six-month extension. So an American living abroad has two filing extensions running concurrently. Both start with the default filing deadline of April 15, 2017. One of them runs for two months and doesn’t require any paperwork. The other one runs for six months, and requires paperwork: Form 4868.
All of that was the unnecessary excess information I promised. But good stuff, right? You have a great topic to bring up at cocktail conversations. Now you understand how you arrived at October 15, 2017, with a valid extension of time. You, the American abroad, filed a Form 4868 on or before June 15, 2017, and you paid up your 2016 tax liability at the same time. To get yourself an extra two months of time (until December 15, 2017) to file your 2016 income tax return, you have to write a paper letter. Yes, we are off the fairway and into the rough. There are no tax forms for what we need to do next. First, let’s look at the law so you can see what it requires. Treasury Regulations Section 1.6081-1 is where you look in the Holy Tax Scriptures for the answer. Section 1.6081-1(a) gives the IRS the authority — in its discretion – to grant you an additional extension of time. Section 1.6081-1(b) tells you how to do it, and what to put in the letter. For your late-night reading pleasure, here is the entire Section:
1.6081-1(a) In General.
The Commissioner is authorized to grant a reasonable extension of time for filing any return, declaration, statement, or other document which relates to any tax imposed by subtitle A of the Code and which is required under the provisions of subtitle A or F of the Code or the regulations thereunder. However, other than in the case of taxpayers who are abroad, such extensions of time shall not be granted for more than 6 months, and the extension of time for filing the return of a DISC (as defined in section 992(a)), as specified in section 6072(b), shall not be granted. Except in the case of an extension of time pursuant to Section 1.6081-5, an extension of time for filing an income tax return shall not operate to extend the time for the payment of the tax unless specified to the contrary in the extension. For rules relating to extensions of time for paying tax, see Section 1.6161-1.
1.6081-1(b) Application For Extension Of Time—
1.6081-1(b)(1) In General.
Under other sections in this chapter, certain taxpayers may request an automatic extension of time to file certain returns. Except in undue hardship cases, no extension of time to file a return will be allowed under this section until an automatic extension of time to file the return has been allowed under the applicable section. No extension of time to file a return will be granted under this section for a period of time greater than that provided for by automatic extension. A taxpayer desiring an extension of the time for filing a return, statement, or other document shall submit an application for extension on or before the due date of such return, statement, or other document. If a form exists for the application for an extension, the taxpayer should use the form; however, taxpayers may apply for an extension in a letter that includes the information required by this paragraph. Except as provided in § 301.6091-1(b) of this chapter (relating to hand-carried documents), the taxpayer should make the application for extension to the Internal Revenue Service office where such return, statement, or other document is required to be filed. Except for requests for automatic extensions of time to file certain returns provided for elsewhere in this chapter, the application must be in writing, signed by the taxpayer or his duly authorized agent, and must clearly set forth—
The particular tax return, information return, statement, or other document, including the taxable year or period thereof, for which the taxpayer requests an extension; and
An explanation of the reasons for requesting the extension to aid the internal revenue officer in determining whether to grant the request.
1.6081-1(b)(2) Taxpayer Unable To Sign.
In any case in which a taxpayer is unable, by reason of illness, absence, or other good cause, to sign a request for an extension, any person standing in close personal or business relationship to the taxpayer may sign the request on his behalf, and shall be considered as a duly authorized agent for this purpose, provided the request sets forth the reasons for a signature other than the taxpayer’s and the relationship existing between the taxpayer and the signer.
1.6081-1(c) Effective/Applicability Dates.
This section applies to requests for extension of time filed after July 1, 2008.
Now it is time to write a letter to the Internal Revenue Service. The key ingredients for this letter are:
Why a letter? The Treasury Regulations say so. The IRS told you to write a letter (because a form does not exist), and they’ve told you to provide the information required by “this paragraph.”
Treasury Regulations Section 1.6081-1(b)(1)(i) asks you to tell the IRS what you need the extension for. They want to know:
The particular tax return, information return, statement, or other document, including the taxable year or period thereof, for which the taxpayer requests an extension[.]
Your letter should say:
“I request an extension to file Form 1040 for the 2016 tax year until December 15, 2017.”
Treasury Regulations Section 1.6081-1(b)(1)(ii) asks you for a reason. Why should the IRS grant you an extension of time from October 15, 2017 until December 15, 2017? The reasons you need an extension are usually along the lines of:
“I need more time to gather income and expense information necessary to accurately prepare my 2016 income tax returns. I live outside the United States and this takes additional time to accomplish due to communication and mailing delays.”
If there is a specific thing that is slowing you down, it is good to mention that as well. “I need information from MegaGiantJuggernaut Bank to compute my income on Form 8621 for foreign mutual funds I own” might be something useful to add. If of course it is true. Or pick anything that applies to you, and add it to your letter. There is no magic language to use. Just be sure that your letter does NOT sound like “I sat around and played Procrastination Roulette and OMG it’s October already? Yikes!” Make your letter sound like you were a diligent little taxpayer and the successful completion of your appointed task is being prevented by people and events outside your control. The extra two months will give you the time to surmount those external forces.
You send the letter to the IRS Service Center where you ordinarily file your income tax returns. See Treasury Regulations Section 1.6081-1(b), which says, in relevant part:
Except as provided in §301.6091-1(b) of this chapter (relating to hand-carried documents), the taxpayer should make the application for extension to the Internal Revenue Service office where such return, statement, or other document is required to be filed.
For an American abroad, this is:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0045
Me? I would use a private delivery service: FedEx, DHL, etc. I’m paranoid. I have gone through the fights with the government about proof of mailing of tax returns when something was dropped in the mail in a postal service outside the United States and was that tax return filed timely or not according to the IRS. It’s worth the extra money to emphatically prove that something arrived at the IRS office. The way you prove that is through the power of capitalism. Use a private company like UPS, DHL, or FedEx that gets a signature and proof that your envelope arrived at the IRS. The IRS specifically permits you to use a Private Delivery Service). The three approved companies are DHL, FedEx, and UPS. If you use such a service, you will need to send the envelope to a street address. The IRS has a web page that gives you the street address for IRS Service Centers. If you are sending your extension request to Austin, Texas, the street address to use is:
Internal Revenue Submission Processing Center
3651 S IH35
Austin TX 78741
Do not wait until October 15 to send that letter from a foreign country. SEND IT NOW. Everyone thinks “If I have it postmarked on that date I have filed my IRS stuff on that date.” Ain’t necessarily so, Bucky. “Postmarked by the loving Postal Service in [INSERT COUNTRY] on October 15″ does not mean, necessarily, that the IRS will treat you as having timely filed your request for an extension of time on or before October 15.
If you send in a letter requesting an extension of time to December 15, 2017 to file your 2016 income tax return, you won’t hear from the IRS. No file-stamped copy, no nuthin’. Just silence.
Your 2016 tax return will be filed before December 15, 2017. Attach these things to your tax return:
Also write “Taxpayer Abroad” on the top of Form 1040, Page 1. Red sharpie! It can’t hurt.
Congratulations. By the time you finish with your 2016 income tax returns, it will December 15, 2017. It’s almost 2018, and time for you to start thinking about your 2017 income tax returns.
Other forms have different filing deadlines. So do not assume this procedure works for every form you have to file with the IRS. A quick example off the top of my head: Form 3520-A if you have a foreign trust. The deadline for that is March 15. This blog post just applies to Form 1040.