Can a client rely on his preparer to file an extension?

• Jurisdiction: United States
• Date: 01 October 1997
• Author: Goca, Neil P., III

Who is ultimately responsible for filing extension requests for clients' tax returns, and what kind of liability do accountants have by not filing these extension requests? This issue was raised in the recent case of McMahan, 2d Cir., 5/23/97.

The taxpayer, a lawyer and partner in a law firm, relied on his business partner, an attorney with tax expertise who had prepared the taxpayer's return in prior years and who had filed for the taxpayer's automatic extension, to file an additional extension of time to file his individual return. Both the taxpayer and the taxpayer's assistant reminded the business partner several times about the approaching deadline and filing of the extension request. (The taxpayer knew that this additional extension request was not automatic.) The business partner assured the two that...