The IRS has released final, temporary (TD 9821) and proposed (REG-128483-15) regulations updating the due dates and extensions of time to file for various tax returns and information returns to reflect recent statutory changes. Affected forms include Form W-2 (series, except Form W-2G), Form W-3, Form 990 (series), Form 1099-MISC, Form 1041, Form 1041-A, Form 1065, Form 1120 (series), Form 4720, Form 5227, Form 6069, Form 8804 and Form 8870.

Background

Section 2006 of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 made a number of changes to certain tax return due dates. Additional changes to certain information return due dates were included in Section 201 of the Protecting Americas from Tax Hikes Act of 2015. These changes include:

— C corporation income tax return: due date changed from the 15th day of the 3rd month following close of tax year (i.e., March 15 for calendar-year filers) to the 15th day of the 4th month following the close of the tax year (i.e., April 15 for calendar-year filers)

— C corporation automatic extension of time to file: extended to six months, with two exceptions for tax years beginning before January 1, 2026: (1) automatic extension for calendar-year filers is five months (although IRS regulations provide a six-month automatic extension as discussed later); and (2) automatic extension for C corporations with a June 30 year end is seven months

— Partnership income tax return: due date changed from the 15th day of the 4th month following close of tax year (i.e., April 15 for calendar-year filers) to the 15th day of the 3rd month following the close of the tax year (i.e., March 15 for calendar-year filers)

— Information returns in Form W-2 series, Form W-3, and "any returns or statements required by the Secretary to report nonemployee compensation" (i.e., Form 1099-MISC): due date moved to earlier,from February 28/29 to January 31 of the calendar year following the calendar year for which the information is being reported (whether filed on paper or electronically)

All automatic extensions mentioned in this Tax Alert require the filing of an extension request with the relevant authority. The statutory changes generally apply for tax years beginning after December 31, 2015. Please see Tax Alert 2017-276 for more information on statutory due date and extension changes.

New regulations

The new regulations adopt the statutory changes made to various return due dates and extensions. They generally apply to returns filed on or after the date of publication of the regulations (July 20, 2017). As the changes generally reflect statutory changes made for tax years beginning after December 31, 2015, however, those statutory changes supersede the former regulations. In addition, taxpayers may elect to apply the new regulations to returns filed for periods beginning after December 31, 2015. The new regulations do not address statutory changes to return due dates for Form 3520, Form 3520-A, or FinCEN Form 114; these changes will be addressed in separate regulations.

Partnership and corporate tax returns

The new regulations reflect the statutory changes to the corporate and partnership due dates. For extensions for C corporation returns, the regulations provide an automatic six-month extension for all corporations, other than those that end on June 30 and before January 1, 2026. Short-period returns ending on any day in June are treated as if the return was for a period ending on June 30 for purposes of these rules. The regulations similarly allow a six-month automatic extension for partnerships filing an appropriate application.

Form 1041, "U.S. Income Tax Return for Estates and Trusts"

The regulations provide an automatic five-and-a-half month extension of time for a non-bankruptcy estate or trust to file Form 1041 (increased from five months), resulting in an extended deadline of September 30 for calendar-year filers. The regulations do not change the rules for bankruptcy estates.

Exempt organizations

The regulations provide an automatic six-month extension of time for exempt organizations to file Form 990 series returns and other returns eligible for extensions under Reg. Section 1.6081-9, such as Form 5227 and Form 1041-A (although Form 1041-A was not addressed in the statute). The regulations also add Form 1120-POL, "U.S. Tax Return for Certain Political Organizations," to the list of forms eligible for the automatic six-month extension.

Form W-2 series, Form W-3, and Forms 1099-MISC that report nonemployee compensation

For Form W-2 (series), Form W-3, and Forms 1099-MISC that report nonemployee compensation, the regulations reflect the statutory change, adopting a due date of January 31 of the calendar year following the calendar year for which the information is being reported.

Implications

These regulations, while generally implementing the statutory due date and extension changes already in effect, are a helpful reminder of the significant changes made this year. Taxpayers should ensure their procedures are updated to make timely filings, both with the IRS and any state taxing authorities.

As an example, the earlier due date to file Forms W-2 affects not only federal filings, but also a large number of states that are now following the federal rules. Eliminating the lag between the due date for distributing employee statements and filing returns means that businesses can no longer rely on employees telling them about Form W-2 errors before they are filed with taxing authorities. Instead, businesses have had to avoid costly corrections to information returns by accelerating their year-end reporting processes and doubling their review efforts before submitting Forms W-2 to taxing authorities.

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