IRS Delays Due Date for Basis Statements One Additional Month to Allow for Publication of Proposed Regulations

The IRS delayed the due date for filing the first Forms 8971 in Notice 2016-19.  Previously in Notice 2015-57 the IRS had delayed the date for initial filings of any return due prior to February 29, 2016 to February 29, 2016. 

The IRS has pushed that date back by one month in this ruling, along with the required notices to beneficiaries.  As the Notice provides:

Statements required under sections 6035(a)(1) and (a)(2) to be filed with the IRS or furnished to a beneficiary before March 31, 2016, need not be filed with the IRS and furnished to a beneficiary until March 31, 2016. 

The IRS, recognizing that many executors and their advisers were not clear on exactly what was to be reported and were unclear on properly completing the form, have also suggested that advisers wait for the issuance of proposed regulations before preparing the statements required.

The Treasury Department and IRS recommend that executors and other persons required to file a return under section 6018 wait to prepare the statements required by section 6035(a)(1) and (a)(2) until the issuance of proposed regulations by the Treasury Department and the IRS addressing the requirements of section 6035.  The Treasury Department and the IRS expect to issue proposed regulations under sections 1014(f) and 6035 very shortly.

Under a new provision added to the IRC last summer by Congress any executor of an estate required to file a Form 706 is required to furnish statements to the IRS and any person acquiring any interest in property from the estate detailing information regarding the value of the property included in the taxable estate.  Such a statement under the law is due by earlier of 30 days after the Form 706 is filed or 30 days after the return was required to be filed (taking into account any extensions of time to file the return actually obtained).

At the beginning of February the IRS published the final version of Form 8971 and its related instructions.  Form 8971 is to be used to report this information to the IRS, and Schedule A of the form contains the information that will be given to each person receiving an interest in property from the estate.

The information reporting requirement affected Forms 706s actually filed on or after July 31, 2015.