Extending by means of Automatic Extension

[TPApril]

2 questions, unrelated to each other, but related to use of Automatic Extension:

1. I understand the plan year has to match employer's tax year.  How about just the plan year end? ie a short plan year was declared from 7/1-12/31 and the ER's tax year is 12/31.
2. Plan sponsor insists they never use Form 5558 but always rely on their own Automatic Extension of their business tax returns. Do other TPA's have plans that rely on this?  We have always taken the approach to file 5558 no matter what, if it needs to be extended.

[Bri]

I just took a peek at the instructions, no help there - that almost insinuates the sponsor must have an identically short tax year.

And I've only "relied" on the automatic extension as an "oh bleep" fallback after realizing a 5558 was skipped - typically we'd just do 5558s en masse to try to avoid the issue.

[CuseFan]

Agree 5558 is the best option for extensions, especially since it often adds a month versus the tax return extension.

Since return due dates are tied to year-end (fiscal and/or plan) I would think having the same year-end would suffice rather than requiring the entire plan and fiscal years to be identical, but I do not know that for certain.

[pmacduff]

plus they are so easy to file, why not?

[TPApril]

Agreed 100%.

I did have one client once who refused to allow me to file one. They were a CPA firm and wanted to always rely on their own tax extension.

[Bill Presson]

I just don't understand why people intentionally create hardships for themselves and others.

[CuseFan]

2 hours ago, Bill Presson said:

just don't understand

Agreed, and unfortunately happens too frequently.