Summarize Key Issues for Extensions
As practitioners prepare extensions for the upcoming filing due date, it is important to tell clients about estimates used in computing the amount due for the extension.
For example, if a client has not yet received a Schedule K-1, it is important to tell the client that an estimate of the income from that missing K-1 was used to compute the amount due with the extension. It is also important to tell the client that, if the actual amount of income is more than the estimate used to prepare the extension, the client will owe additional taxes, penalties and interest.
Such warnings should be done in writing.