IRS Perfection Period: How to Fix Errors and Resubmit a Rejected IRS Extension Request 

What is the Perfection Period? 

The Perfection Period is a grace period granted by the IRS, allowing taxpayers to correct and resubmit rejected electronic filings without penalties. For Forms 7004 and 8868, which are used to request filing extensions, the perfection period is5 calendar days. 

How It Works: 

• If your Form 7004 is rejected due to an error (such as F7004-905-03), you can fix and retransmit it within the perfection period without it being considered late. 
• The IRS will not impose late filing penalties if the corrected extension request is accepted within this timeframe.
  • For example, a business owner filed Form 7004 on March 16 to request an extension for a S corporation’s Form 1120-S. However, the IRS rejected the filing on March 16 due to Error Code F7004-905-03, indicating that the wrong form code was selected (e.g., Form 1065 instead of Form 1120).

What Happens Next?

The business owner has until March 20 (5 calendar days from March 16) to correct the error and retransmit Form 7004 without facing late filing penalties. 

• If the correction is made and the form is retransmitted by March 20, the IRS will accept the extension request without penalties. 
• If the correction is made after March 20, the filing will be considered late, and penalties may apply. 

How the Perfection Period Works After Form Rejection 

The first rejection refers to the IRS initially rejecting a form due to an error. The perfection period starts from the date of the first rejection. However, if the retransmitted return is also rejected, the perfection period does not reset—it still counts from the first rejection date. 

• For example, if Form 7004 is rejected on March 16, corrected and retransmitted on March 18 (rejected again), then accepted on March 20, it remains within the 5-day grace period, making the extension request timely with no penalties. 

By fixing errors within the Perfection Period, business owners can ensure that their Form 7004 extension request is accepted without additional penalties. 

Steps to Fix and Retransmit a Rejected Form 7004 

Step 1: Access Your Dashboard 

• Sign in to your TaxZerone account. 
• Click on the Dashboard or the extension forms icon to access your rejected filing. 

Step 2: Locate the Rejected Filing  

• Your rejected filings will be marked as ‘Rejected’ on the Dashboard. 
• Click on “View Errors” to review the specific reasons for the rejection. 

Step 3: Review the Rejection Notice 

• Carefully read the IRS rejection message to understand why your filing was rejected. 
• Click the “Fix Error” button to begin making the necessary corrections. 

Step 4: Correct the Form Code for Form 7004 

• Click the form code displayed on Line 1 of your rejected filing. 
• Select the correct form code for your business to ensure proper resubmission, then click “Save & Continue” to proceed with fixing any other errors.
  • For reference, here are some common Form 7004 codes:
    • 1120– U.S. Corporation Income Tax Return
    • 1120-S– U.S. Income Tax Return for an S Corporation
    • 1065– U.S. Return of Partnership Income
    • 1041– U.S. Income Tax Return for Estates and Trusts

Step 5: Retransmit the Return 

• After making all corrections, review your filing details carefully. 
• Click “Retransmit to IRS” to resubmit your corrected Form 7004. 

Important Note: You will have a perfection period of up to 5 days to correct errors in your return. After that, penalties may apply. 

By using the Perfection Period, you can correct and resubmit rejected filings without penalties. Simply review the IRS rejection notice, fix the errors, and resubmit it through TaxZerone. Monitor your dashboard to track the updated filing status.