Posted by: Taxlitigator | August 1, 2015

New Filing Due Dates for FBARs, Partnership and C Corporation Returns!

On July 31, President Obama signed into law H.R. 3236, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015[1],” which, among other issues, modifies the due dates for several common tax returns, overrules the Supreme Court’s Home Concrete decision, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries.

NEW FBAR FILING DUE DATES – For returns for taxable years beginning after December 31, 2015, the due date for FinCEN Form 114 is changed from June 30 to April 15, and taxpayers will be allowed a six-month extension to October 15. For any taxpayer required to file an FBAR for the first time, any penalty for failure to timely request for, or file, an extension, may be waived by the IRS.

PARTNERSHIP RETURN DUE DATES – Returns of partnerships under Code section 6031 and returns of S corporations under Code §§ 6012 and 6037 made on the basis of the calendar year shall be filed on or before the 15th day of March following the close of the calendar year, and such returns made on the basis of a fiscal year shall be filed on or before the 15th day of the third month following the close of the fiscal year. Accordingly, for partnership returns, the new due date is March 15 (for calendar-year partnerships) and the 15th day of the third month following the close of the fiscal year (for fiscal-year partnerships). Currently, these returns are due on April 15, for calendar-year partnerships. The act directs the IRS to allow a maximum filing extension of six months for Forms 1065, U.S. Return of Partnership Income.

C CORPORATION RETURN DUE DATES – For C corporations, the new return due date is the 15th day of the fourth month following the close of the corporation’s year (April 15 for calendar-year corporations) – these returns are currently due on the 15th day of the third month following the close of the corporation’s year.[2]

C corporations will be allowed an automatic 6-month extension to file, except that calendar-year corporations would get a five-month extension until 2026 and corporations with a June 30 year end would get a seven-month extension until 2026. The new filing due dates will apply to returns for tax years beginning after December 31, 2015. However, for C corporations with fiscal years ending on June 30, the new filing due dates will not apply until tax years beginning after December 31, 2025 (yes, 2025).

VARIOUS EXTENSIONS OF TIME TO FILE – For returns for taxable years beginning after December 31, 2015, the IRS is to modify its regulations to allow a maximum extension of:

  • 5 1/2 months ending on September 30 for calendar year taxpayers on Form 1041, U.S. Income Tax Return for Estates and Trusts;
  • 3 1/2 months ending on November 15 for calendar year plans on Form 5500, Annual Return/Report of Employee Benefit Plan;
  • 6 months ending on November 15 for calendar year filers on Form 990, Return of Organization Exempt From Income Tax;
  • an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) on Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code;
  • an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) Form 5227, Split-Interest Trust Information Return;
  • an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) on Form 6069, Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction; and
  • an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) on Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts; and
  • the due date for Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, will be April 15 for calendar-year filers, with a maximum six-month extension. The due date of Form 3520–A, Annual Information Return of a Foreign Trust with a United States Owner, shall be the 15th day of the 3d month after the close of the trust’s taxable year, with a maximum six-month extension.

STATE CONFORMITY – California and various other states will not automatically conform to any of these due date changes, so separate legislation will be required if they are going to change and conform to the due dates for these returns.

MODIFICATION OF MORTGAGE REPORTING REQUIREMENTS ON RETURNS RELATING TO MORTGAGE INTEREST RECEIVED IN TRADE OR BUSINESS FROM INDIVIDUALS- Code § 6050H(b)(2) is amended to require new information on the mortgage information statements that are required to be sent to individuals who pay more than $600 in mortgage interest in a year. These statements will now be required to report the outstanding principal on the mortgage at the beginning of the calendar year, the address of the property securing the mortgage, and the mortgage origination date. This change applies to returns required to be made, and statements required to be furnished, after December 31, 2016.

CONSISTENT BASIS REPORTING BETWEEN ESTATE AND BENEFICIARIES – Code § 1014 is amended to provide that anyone inheriting property from a decedent cannot treat the property as having a higher basis than the basis reported by the estate for estate tax purposes.

New Code § 6035 requires executors of estates that are required to file an estate tax return to furnish statement identifying the value of each interest in such property as reported on the estate tax return to the IRS and to each person acquiring any interest in property included in the decedent’s gross estate for Federal estate tax purposes. These statements will identify the value of each interest in property acquired from the estate as reported on the estate tax return.

These statements must be filed on or before than the earlier of (i) the date which is 30 days after the date on which the return under Code § 6018 was required to be filed (including extensions, if any), or (ii) the date which is 30 days after the date such return is filed. These new reporting provisions apply to property with respect to which an estate tax return is filed after the date of enactment (July 31, 2015).

CLARIFICATION OF 6-YEAR STATUTE OF LIMITATIONS IN CASE OF OVERSTATEMENT OF BASIS – OVERRULING HOME CONCRETE – In Home Concrete & Supply, LLC, 132 S. Ct. 1836 (2012), the Supreme Court held that the extended six-year statute of limitation under Code § 6501(e)(1)(A), which applies when a taxpayer “omits from gross income an amount properly includible” in excess of 25% of gross income, does not apply when a taxpayer overstates its basis in property it has sold. In response to Home Concrete, Code § 6501(e)(1)(B) has been amended to add: “An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income.” The change applies to returns filed after the date of enactment (July 31, 2015) as well as previously filed returns for which the applicable statute of limitations remains open under Code § 6501.

[1] “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015,” H.R.3236 (enacted July 31, 2015). See https://www.congress.gov/bill/114th-congress/house-bill/3236/text#toc-HCFC1B5C758A944DE807AC0FC688A702A

[2] S corporation returns will continue to be due on the 15 day of the third month following the close of the taxable year (March 15 for calendar-year S corporations)


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