The IRS has issued final regulations (TD 9838) confirming that filers and transmitters of Forms 1099, except Forms 1099-MISC reporting nonemployee compensation, may obtain an automatic 30-day extension of time to file with the IRS.

Background

In 2015, the IRS issued temporary and proposed regulations (TD 9730; REG-132075-14) on extensions of time to file information returns (see Tax Alert 2015-1623). Under the temporary regulations, a filer may request an automatic 30-day extension of time to file Forms 1099 by filing Form 8809, "Request for Extension of Time to File Information Returns." A filer may request an additional, non-automatic 30-day extension of time if the filer satisfies certain requirements.

The 2015 notice of proposed rulemaking proposed to remove the automatic extension of time to file Forms 1099, and to allow only a single non-automatic 30-day extension of time to file.

On August 1, 2018, the IRS issued final regulations. The final regulations only remove the automatic extension of time to file the Form W-2 series (except Form W-2G) and forms reporting nonemployee compensation. (Filers currently report nonemployee compensation in box 7 of Form 1099-MISC.) However, the preamble to the final regulations state that the IRS continues to study the appropriateness of the automatic extension for other information returns.

Under the regulations, a 1099 filer may obtain an automatic 30-day extension for filing all Forms 1099, except for forms reporting nonemployee compensation. Generally, under the final regulations, a filer of a Form W-2 or a form reporting nonemployee compensation may only request one non-automatic 30-day extension of time to file. The due date for filing Forms W-2 and returns reporting nonemployee compensation is January 31 of year following the calendar year for which the information is being reported. (For additional details on TD 9838, see Tax Alert 2018-1575.)

Implications The final regulations are a welcome relief to custodians and brokers who file Form 1099-DIV, Form 1099-INT, Form 1099-OID, and Form 1099-B to report investment income. Some mutual fund factors are not available until late in the filing season. Further, preparing these 1099 forms has become increasingly complex in recent years due to the basis reporting law and regulations on widely held fixed investment trusts (WHFITs).

———————————————