The IRS has announced penalty relief (Notice 2013-24) for corporations, individuals, trusts, estates and other taxpayers who underpay or underpaid their estimated tax liability when extending a 2012 tax return that includes any form that was delayed by the late enactment of the American Taxpayer Relief Act of 2012 (ATRA).

Taxpayers may generally file an automatic six-month extension for annual tax returns due March 15 or April 15, but the extension does not extend the time to pay tax. For an extension to be valid, taxpayers must properly estimate their tax liability and generally must pay the liability with the extension request by the original due date of the return. Section 6651(a)(2) imposes a penalty for late tax payments unless the taxpayer shows that the failure was due to reasonable cause and not willful neglect.

Notice 2013-24 will waive the Section 6651(a)(2) penalty for taxpayers extending 2012 tax returns and attaching any of the forms that the IRS issued late. The late enactment of ATRA forced the IRS to delay the release of many forms and attachments affected by the legislation. The

IRS acknowledged that the delay may make it difficult for some taxpayers to properly estimate tax by the time they file for an extension.

The IRS will therefore abate Section 6651(a)(2) failure to pay penalties due to reasonable cause for any taxpayer who extends a tax return that includes one of the affected forms, provided that a good- faith estimate of tax is paid by the original due date of the return and any tax owed is fully paid by the extended due date. When responding to an assessment notice, taxpayers should submit a letter describing eligibility for the relief and identify the forms.

The following forms qualify taxpayers for relief:

  • Form 3800, General Business Credit
  • Form 4136, Credit for Fuel Tax
  • Form 4562, Depreciation and Amortization
  • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands
  • Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations
  • Form 5695, Residential Energy Credits
  • Form 5735, American Samoa Economic Development Credit
  • Form 5884, Work Opportunity Credit
  • Form 6478, Alcohol and Biofuels Credit
  • Form 6765, Research Activities Credit
  • Form 8396, Mortgage Interest Credit
  • Form 8582, Passive Loss Limitations
  • Form 8820, Orphan Drug Credit
  • Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit
  • Form 8839, Qualified Adoption Expenses
  • Form 8844, Empowerment Zone and Renewal Community Employment Credit
  • Form 8845, Indian Employment Credit
  • Form 8859, DC Homebuyer Credit
  • Form 8863, Education Credits
  • Form 8864, Biodiesel and Renewable Diesel Fuels Credit
  • Form 8874, New Markets Credits
  • Form 8900, Qualified Railroad Track Maintenance Credit
  • Form 8903, Domestic Production Activities Deduction
  • Form 8908, Energy Efficient Home Credit
  • Form 8909, Energy Efficient Appliance Credit
  • Form 8910, Alternative Vehicle Credit
  • Form 8911, Alternative Fuel Vehicle Refueling Property Credit
  • Form 8912, Tax Credit Bonds
  • Form 8923, Mine Rescue Training Credit
  • Form 8932, Credit for Employer Differential Wage Payments
  • Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit

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