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Procrastinators, Rejoice!

The IRS recently announced that the filing deadline for 2006 tax returns will be April 17, 2007. Why? Well, as a Deadhead, I immediately think of Jerry Garcia and the lyrics "what a long, strange trip it's been."

Enough reminiscing. It's always been the rule that if April 15 falls on a Saturday or Sunday, the filing deadline is moved to the next following business day. For the 2006 tax filing season, since April 15 falls on a Sunday this year, the new filing deadline would normally become April 16.

But you see, April 16 is Patriots' Day and is recognized as a legal holiday in Maine and Massachusetts. In years past, when the deadline has fallen on the 16th, taxpayers filing in the six eastern states that are served by an IRS facility in Massachusetts received an extra day, since the doors were closed at the Massachusetts center on the 16th. The rest of the country still had to live with an April 16 filing deadline.

Except for taxpayers residing in the District of Columbia.

Even though D.C. filers may or may not use the Massachusetts filing center, depending on the form being filed, April 16 is a local holiday known as Emancipation Day. As a result, the folks living in D.C. were also allowed an additional day to file their federal tax returns.

So when April 16 has fallen on a Monday, it was a mixed bag as to the correct filing date depending on where you lived.

And then something unusual happened: Somebody actually read the law and applied it correctly. Under a federal statute enacted decades ago, holidays observed in the District of Columbia have an impact nationwide on tax issues, not just in Washington. Officials recently became aware of the intersection of the national filing day and the local observance of the new Emancipation Day holiday ... after most IRS forms and publications for the current tax filing season went to print.

Oops.

Granted, there are so many laws that it's difficult to read and follow them all. One of my favorite quotes is from Mark Twain, who said, "No man's life, liberty, or property is safe while the legislature is in session." Indeed. And in any event, the entire country now has an extra day to file and pay federal taxes. And that additional day applies to many other federal tax issues, including:

  • Federal requests for an automatic six-month filing extension.
  • 2006 contributions to an IRA, both Roth and traditional.
  • First-quarter 2007 estimated tax payments.
  • 2003 individual refund claims in order to meet the three-year statute of limitations
  • The filing date for partnership returns.

But watch out for state taxes with a similar due date. The tax community assumes that many states will follow suit with their own April 17 filing deadline this year. But that's only an assumption! It's up to you to determine your state's filing date and file accordingly, so that you don't get hit with additional penalties or interest for being late.

Thank goodness we won't have to deal with this again until 2012. I might be retired by then.

Roy Lewis, being a very old man, is always amazed at how complicated life has become with all of the "conveniences" we now have. But he understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns, as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though. The Motley Fool has a disclosure policy.


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