Tax Filing Extensions

Over the Pesach break, Uncle Sam and Governor Spitzer each pooped in my mailbox. Not as much of a tax refund as last year, but the checks have been deposited (and will soon be spent, inasmuch as my son is about to begin college).

But not everyone files their tax returns as early as we do. There is the inevitable last-minute line at the post office every year.

On account of the storm, the IRS has given a 48-hour extension to "Taxpayers directly impacted by the storm." This wording is ambiguous, and is not at all clarified by the IRS's supplemental "Frequently Asked Questions" regarding the extension.

And the IRS has also given a 6-month extension to those affected by the Virginia Tech massacre, which "applies to the victims, their families, emergency responders and university students and employees."

Not that such extensions are per se unfair or overly-indulgent. But the way they are worded is susceptible to diverse interpretation. I predict that the IRS will either (1) become bogged down in the construction of these ambiguous terms, whether in the courts and/or its own staff; or (2) the IRS will throw in the towel and just grant the extension to anyone who claims it, without any meaningful investigation or verification.

The IRS has left itself open to challenge by drafting ambiguous and uncertain regulatory pronouncements.

Disclosure: On account of the storm, hundreds of flights in and out of New York were canceled or delayed or diverted. Many of my students returning after the Passover break were among the affected travelers. There was an assignment due on Monday 16 April, but, given the travel situation of so many of my students, I extended the deadline to Wednesday 18 April.