Congress is enacting tax laws in bits and pieces this year, attaching provisions to various unrelated tax bills. This time the bill to which the new law was attached was the short term highway funding bill passed by Congress just before the August recess (H.R. 3236) and signed into law by the President on July 31, 2015. This bill makes a number of changes, most notably to the due dates for tax returns.
The new due dates for returns will generally take effect for tax years beginning after December 31, 2015 except for C corporations with June 30 fiscal years where the new due dates will not apply until years beginning after December 31, 2025.
The new due dates are:
- Partnerships – 15th day of the third month following the end of the fiscal year (currently it is the fourth month)
- S Corporations – due date will remain the 15th day of the third month following the end of the corporation’s fiscal year
- C corporations – 15th day of the fourth month following the end of the fiscal year (currently it is the third month)
- FINCEN Report 114 – April 15th with a maximum 6-month extension. For any taxpayer required to file the form for the first time, the IRS will be authorized to waive any penalty on a failure to timely request or file an extension
- Form 3520 – Due date of April 15th with a maximum extension of six months
- Form 3520-A – Due date of April 15th with a maximum extension of six months
The law also contains revisions to extension provisions by ordering the IRS to modify the relevant regulations to provide:
- Form 1065 – maximum six-month extension period ending on September 15th for calendar year taxpayers
- Form 1041 – maximum extension for will be a 5 ½ month extension ending on September 30 for calendar year taxpayer
- Form 5500 – maximum extension will be 3 ½ months ending on November 15
- Form 990 – automatic extension of 6 months ending on November 15
- Form 4720 – automatic six-month extension beginning on the due date for filing the return
- Form 5227 - automatic six-month extension beginning on the due date for filing the return
Changes are also being made to require additional information to be reported on Form 1098 for mortgage interest. The form must report the outstanding principal balance at the beginning of the year, the address of the property securing the mortgage and the mortgage origination date. This will affect returns and statements due after December 31, 2016.
The new bill mandates that heirs will be banned from claiming a basis for inherited property in excess of amounts reported on a Form 706 for estate tax purposes. The executor who files a Form 706 is required to file an information return to the IRS and payee statements giving the value reported. The rules will apply to estate tax returns filed after the date of enactment.
Finally, the Congress modified §6015(e)(1)(B) to provide that an overstatement of basis will count as an understatement of gross income, reversing the Supreme Court’s decision in the case of Home Concrete & Supply, LLC, 132 S. Ct. 1836 (2012).