With about a week to go, most firms are triaging on the assumption that everything in the pile dies on the same date. For a meaningful slice of an expat practice, that is not true.
There is a further extension available to taxpayers abroad, it runs to 15 December, and the window to request it closes on 15 October — the same day the return would otherwise be due. Which means the decision to ask has to be made now, not on the fifteenth.
This article sets out what is actually available, what it does not cover, and how the answer should change which returns you push hardest this week. Confirm any of it against the client's own facts before relying on it; the rules below are the IRS's, not ours.
The three extensions, in order
For a US citizen or resident living abroad, the sequence is longer than the domestic one.
An automatic two months to 15 June. This is not requested; it applies if, on the regular due date, you were living outside the United States and Puerto Rico with your main place of business or post of duty outside the United States and Puerto Rico — or you were in military or naval service on duty outside them. A statement explaining which of the two situations applied gets attached to the return.
A further four months to 15 October, by Form 4868 in the ordinary way.
A discretionary additional two months to 15 December. This is the one most firms never use, and it works differently from the other two.
How the December extension actually works
There is no form. You send the IRS a letter explaining why the additional two months are needed, and it has to be sent by the extended due date — 15 October for a calendar-year taxpayer.
It is discretionary, not automatic. And the feedback loop is uncomfortable: you will not hear anything unless the request is denied. Silence is the approval.
A firm used to filing a form and receiving an acknowledgement should understand what it is buying here. It is a reasoned request into a process that only writes back with bad news.
It is also not available to a taxpayer who already holds an approved extension on Form 2350, the one used to wait out the foreign earned income exclusion qualifying period. If you filed a 2350 for this client, this route is closed.
Requests for an individual extension beyond six months are handled centrally rather than by whichever service centre normally receives the client's return, so send it to the right place first time.
Three things it does not do
This is where the December extension gets firms into trouble, and all three traps are avoidable.
It does not extend time to pay. None of these extensions do. Interest runs on unpaid tax from the regular due date — 15 April — regardless of how far the filing date moves. A client who owes and takes December is accruing interest for eight months.
It does not extend the FBAR. FinCEN Form 114 is due 15 April with an automatic extension to 15 October that nobody has to request. That automatic extension is the end of the routine road. A December extension on the income tax return does not carry the FBAR with it, because the FBAR deadline is not set by the income tax extension provisions at all.
This is the trap worth circling. A client granted until December who assumes everything moved with it will have a late FBAR and not know. If you take December, the FBAR still goes on the fifteenth.
It does not apply to domestic clients. There is no equivalent for someone living in Ohio. For most of your pile, 15 October is exactly as final as you thought.
The number that should drive the last week
Here is the part that reorders a triage list, and it has nothing to do with how hard the returns are.
The failure-to-file penalty is 5% of the tax due for each month or part month a return is late, capped at 25%. The failure-to-pay penalty is 0.5% of unpaid tax per month or part month, also capped at 25%. When both apply in the same month, the filing penalty is reduced by the payment penalty, so the combined monthly rate is 5% rather than 5.5%.
Read the base of that calculation carefully. Both penalties are a percentage of tax due.
A client sitting in a refund position, or one whose withholding has already covered the year, has very little at stake in missing 15 October. A client who owes $40,000 is exposed to $2,000 for the first month and part of a month counts as a whole one.
There is a floor as well. A return filed more than 60 days late carries a minimum penalty — for returns required to be filed in 2026, the lesser of $525 or 100% of the tax owed. The "whichever is less" matters: where nothing is owed, that floor is nothing.
So triage by exposure, not by difficulty
Two weeks ago the right question was which returns carry the most hours, which is what we set out in which returns should leave the building.
In the final week the question changes. It is no longer what a return costs you to finish. It is what happens to the client if it does not get finished.
Sort the remaining pile by tax due rather than by complexity. The returns where a large balance is owed are where the next seven days should go, whatever they cost in hours, because that is where missing the date converts directly into money the client pays.
Then separate out anyone abroad. Those clients may have another two months available, and the request has to go before the fifteenth. It is a far better conversation to have on the eighth than on the fourteenth.
What is left is the returns where little or nothing is owed, held by clients who are not abroad. They still have to be filed, and the client will still be unhappy about it. But they are not where the last week should go.
The clients who will not make it
Some of the pile will miss, and by now you can usually name which ones. Most of them are the cases in the waiting pile, where nothing has arrived.
Tell them this week. A client who hears on 8 October that their return will be late, what it will cost them, and exactly what is still missing, is receiving a professional warning. The same client hearing it on 16 October is receiving an excuse.
If they are abroad, the December route is worth raising in that same conversation, because it converts a missed deadline into an extended one — and the letter has to go before the deadline they are about to miss.
Our desk prepares expat and domestic returns — Forms 2555, 1116, 8621, FinCEN Form 114 and Form 8938, alongside 1040, 1120-S and 1065 work. Every return is prepared by one IRS-licensed enrolled agent and reviewed by a second before it reaches your firm. Your letterhead, your client, your review — our hours. Preparing US returns since 2003 — 5,300+ tax returns filed in the last 4 seasons.