Tax Filing Due Date Changes
On July 31, 2015, President Obama signed into law the highway funding bill, which in pertinent sections contains provisions that impact the tax professionals, including tax return or forms due date filing as follows:
- Form 1120, US Corporation Income Tax Return. C Corporations will be allowed a 6-month extension, except that calendar-year corporations would get a 5-month extension until 2026 and corporations with a June 30 year end would get a 7-Month extension until 2026. The new due dates will apply to returns for tax years beginning after Dec. 31, 2015. However, for C corporations with fiscal years ending on June 30, the new due dates will not apply until tax years beginning after Dec. 31, 2025.
- Form 1065, U.S. Return of Partnership Income, the new due date is 15th day of the 3rd month of the following year. For calendar-year partnerships, the date is March 15th day of the following year. A maximum of 6-months extension will be allowed. Currently, these returns are due on April 15th.
- Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, is due April 15 of the following year with a maximum extension of six months. This Form is filed independently and is not part of the Form 1040.
- Foreign Bank Account Report (FBAR), also known as Report of Foreign Bank and Financial Accounts, Form FinCEN 114 (formerly TD F 90-22.1), the due is April 15th, and there will be an extension of six months through October 15th. Under the current law, the due date for filing Form FinCEN 114 is June 30th of the following year and no extensions granted. It is required to be e-filed since July 1, 2013, even the prior years’ FBARs.
- Form 3520-A. Annual Information Return of a Foreign Trust With a U.S. Owner. The act allows a maximum extension of six months.
- Form 1041, U.S. Income Tax Return for Estates and Trusts, allows a maximum extension of 5 1/2 months.
- Form 5500, Annual Return/Report of Employee Benefit Plan, allows a maximum extension of 3 1/2 months.
- Form 990, Return of Organization Exempt From Income Tax. A maximum extension of six months allowed.
- Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. A maximum extension of six months allowed.
- Form 5227, Split-Interest Trust Information Return. A maximum extension of six months allowed.
- Form 6069, Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction. A maximum extension of six months allowed.
- Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts. A maximum extension of six months allowed.
- Additional information of filing Form 1098-Mortgage Interest. Section 6050H 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 and statements due after Dec. 31, 2016.
- Home Concrete case overruled. In Home Concrete & Supply, LLC, 132 S. Ct. 1836 (2012), the US Supreme Court held that the six-year statute of limitation under Section 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. The act a6mends Section 6501(e) (1) (B) to state: “An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income.” This means that understatement with respect to application of the 25% rule, is the same even if caused by overstatement of the basis of property sold. This applies to tax returns filed subsequent the date of enactment as well as previously filed returns that are still open under this section.
- Basis reporting between estates and beneficiaries. The act amends Sec. 1014 to require beneficiaries inheriting property from a decedent show the same basis reported by the estate tax return Form 706. It also creates a new Sec. 6035, which requires executors responsible for filing the Form 706, report the 706 basis to the IRS and all beneficiaries.
Zaher Fallahi, is a Tax Attorney and a CPA, practices as Los Angeles Offshore Accounts Attorney and Orange Offshore Accounts Attorney, and assists taxpayers including Americans Living Abroad and Non-Resident Aliens subject to the US tax law, in resolving their tax problems regarding their Offshore Voluntary Disclosure Program (OVDP), Report of Foreign Bank and Financial Accounts (FBAR), Foreign Account Tax Compliance Act (FATCA) and Foreign Trust. Telephones: (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), e-mail [email protected]