When you timely file an extension for your tax return, and it gets rejected, the IRS permits you five calendar days as a perfection period to perfect and retransmit your extension. Within the perfection period, if you correct and retransmit your rejected extension that passes the filing deadline, the IRS will accept it and still consider the date of the first rejection that occurred.
Please note, the perfection period is NOT the extension of time to file extension after the IRS regular due date. The IRS will not accept any extensions filed after the due date, and you will not get a grace period of 5 days to correct and retransmit it.
Let’s take an example if you are an 1120-S business tax filer, and you have timely filed an extension form 7004 to the IRS, i.e., by March 12, 2021, three days before the filing due date (March 15, 2021), and the IRS rejects it. You will get five calendar days, up to March 17, 2021 (post the filing deadline), as a perfection period to correct and retransmit your rejected federal tax extension to the IRS without any penalty. However, the IRS accepts the retransmitted rejected extension on March 17, 2021; it will still consider the first rejection date, i.e., March 12, 2021, as the date of acceptance.