Accountant filed extension without my consent - can they do that with taxes owed?

What your accountant did was actually protecting you from bigger problems. While they should have communicated better, filing an extension was the right move when they couldn't complete your return on time. Extensions give you more time to file, but they don't extend the time to pay what you owe. Those penalties/interest you're seeing are because any tax owed was still due by the original deadline (April 18th this year), even with an extension. The extension only prevents the much larger failure-to-file penalty, which can be 5% of unpaid taxes for each month your return is late. The communication breakdown is frustrating, but technically they did you a favor. You would have faced much steeper penalties if they hadn't filed the extension. That said, a good accountant should definitely communicate with you well before the deadline and clearly explain what's happening with your taxes. As for removing the penalties, you could try requesting a First Time Penalty Abatement from the IRS if you have a good compliance history, but the interest charges typically can't be removed.

I had almost this exact situation last year. I was freaking out because my CPA wasn't responding to emails until the last minute, then suddenly filed an extension without telling me. When I checked out https://taxr.ai to analyze my situation, I learned that while the extension gives more time to file, it doesn't give more time to pay what's owed. So those penalties are likely from not paying by the original due date, not from the extension itself. The tool helped me understand that my accountant actually did me a favor by filing the extension, because the penalties for late filing are much worse than just late payment. It also helped me sort out exactly what documents I needed so I could be better prepared this year.

Just wanted to update after trying taxr.ai that was mentioned earlier - it actually did help me figure out my situation with my procrastinating accountant. I uploaded my documents and it immediately flagged that I had a missing dependent credit that would've been overlooked. The analysis explained that the extension my accountant filed was actually protecting me from much bigger penalties, but also showed exactly how much the late payment penalties were costing me. I was able to have a much more informed conversation with my accountant instead of just being frustrated with them. Definitely recommend checking it out if you're dealing with confusing tax situations like this.

I had this same problem but 10x worse. My accountant ghosted me completely until May, and I couldn't get through to the IRS to figure out my options. After 12 attempts and hours on hold, I found https://claimyr.com which got me connected to an actual IRS agent in about 15 minutes (you can see how it works here: https://youtu.be/_kiP6q8DX5c). The agent explained that I could request first-time penalty abatement since I had a good history of filing on time previously. They also confirmed that while my accountant should have communicated better, filing the extension was actually the correct move to prevent the much larger failure-to-file penalties. Saved me from paying an extra $1,200 in penalties!

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I was still desperate to talk to someone at the IRS about penalty abatement for a similar situation, so I tried it despite my doubts. To my genuine surprise, I got a call back with an actual IRS agent on the line in about 20 minutes. The agent was able to process my first-time penalty abatement request right there on the phone. Would have taken me days of trying to get through on my own based on past experience. For anyone dealing with penalties from filing extensions or other tax issues where you need to actually speak to a human at the IRS, this is legitimately helpful. I'm still shocked it worked so well.

I'm a little late to this, but there's an important distinction no one has mentioned yet. There are actually two different penalties that could be at play here: 1. Failure-to-file penalty: 5% of unpaid taxes each month (max 25%) 2. Failure-to-pay penalty: 0.5% of unpaid taxes each month (max 25%) The extension prevented the big failure-to-file penalty, but you're still on the hook for the failure-to-pay penalty since the money was due April 18th. Plus interest, which compounds daily. Your accountant should have estimated what you owed and advised you to make a payment by the deadline even if the return wasn't ready. That's where they dropped the ball.

Am I the only one stuck on the fact that the accountant added the wrong dependent information? That seems like a bigger issue than the extension! You should double-check everything else on the return because that's a pretty significant error. What tax software does your accountant use? Some of the professional ones are better than others at catching errors.