Timely filing of extension cannot be delegated

Tax Hot Topics newsletter The Court of Federal Claims held in Baer v. United States (Fed. Cl. Nov. 5, 2020) that a taxpayer cannot delegate the duty to timely file an extension of the filing deadline for a federal income tax return.

The taxpayer in Baer engaged the services of a tax professional to assist with the filing of a federal income tax return. It instructed the tax professional to timely file an extension for filing the return, but the tax professional failed to do so. As a result, the taxpayer was assessed failure to file and failure to pay penalties for the late-filed return.

The taxpayer’s position was that engaging a tax professional and instructing the tax professional to timely file the extension constituted reasonable cause and good faith; and therefore, the penalties should be abated. Citing a long line of cases (including United States v. Boyle, 469 U.S. 241 (1985)), the court rejected taxpayer’s position and held that the timely filing of a federal income tax return is a nondelegable duty on the part of a taxpayer. Accordingly, the court found that reliance on a tax professional to timely file an extension did not constitute reasonable cause and good faith.

David Auclair
National Managing Principal
Washington National Tax Office
T +1 202 521 1515

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