New Law Addresses Changes in Federal Tax Return Filing Dates

The recently enacted “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (P.L. 114-41) contains significant changes to filing deadlines and extensions for certain business and special entity tax returns.

President Obama signed the Act into law on July 31, 2015.

The law was primarily designed as a 3-month stopgap extension of the Highway Trust Fund and related measures.  But it includes a number of important tax provisions including revised due dates for partnership and C corporation returns and revised extended due dates for some returns.

This article provides an overview of those provisions, which may have an impact on families and family businesses.

Revised Due Dates for Partnership and C Corporation Tax Returns

Current Law.  Domestic C corporations (including S corporations) currently file their federal tax returns by the 15th day of the third month after the end of their tax year. Thus, corporations using the calendar year must file their returns by Mar. 15 of the following year. The partnership return is due on the 15th day of the fourth month after the end of the partnership’s tax year. Thus, partnerships using a calendar year must file their returns by Apr. 15 of the following year. Since the due date of the partnership return is the same date as the due date for an individual tax return, individuals holding partnership interests often must file for an extension to file their returns because their Schedule K-1s may not arrive until the last minute.

New Law. Under the new law, in a major restructuring of entity return due dates, effective generally for returns for tax years beginning after Dec. 31, 2015:

  • Partnerships and S corporations will have to file their returns by the 15th day of the third month after the end of their tax year. Thus these businesses using a calendar year ending on Dec. 31st will have to file by Mar. 15 of the following year. In other words, the filing deadline for partnerships will be accelerated by one month; the filing deadline for S corporations stays the same. By having most partnership returns due one month before individual returns are due, taxpayers and tax preparers will generally not have to extend or scurry around at the last minute to file the individual returns of partners in partnerships.
  • C corporations will have to file by the 15th day of the fourth month after the end of their tax year. Thus, C corporations using a calendar year will have to file by Apr. 15 of the following year. In other words, the filing deadline for C corporations will be deferred for one month.

Keep in mind that these important changes to the filing deadlines generally won’t go into effect until the 2016 returns have to be filed. Under a special rule for C corporations with fiscal years ending on June 30, the filing change is deferred for ten years — it won’t apply until tax years beginning after Dec. 31, 2025.

Revised Extended Due Dates for Various Returns

Taxpayers who can’t file a tax form on time can ask IRS for an extension to file the form. Effective for tax returns for tax years beginning after Dec. 31, 2015, the new law directs the Treasury Department to modify its regulations to provide for a longer extension to file a number of forms, including the following:

  • Form 1065 (U.S. Return of Partnership Income) will have a maximum extension of six-months (currently, a 5-month extension applies). The extension will end on Sept. 15 for calendar year taxpayers (i.e., Mar. 15 +6 months = Sept. 15).
  • Form 1041 (U.S. Income Tax Return for Estates and Trusts) will have a maximum extension of five and a half months (currently, a 5-month extension applies). The extension will end on Sept. 30 for calendar year taxpayers (i.e., Apr. 15 + 5½ months = Sept.30).
  • The Form 5500 series (Annual Return/Report of Employee Benefit Plan) will have a maximum automatic extension of three and a half months (under currently law, a 2½ month period applies). The extension will end on Nov. 15 for calendar year filers.

FinCEN Report (“FBAR”) Due Date Revised

Current Law. Taxpayers with a financial interest in or signature authority over certain foreign financial accounts must electronically file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Currently, this form must be filed by June 30 of the year immediately following the calendar year being reported, and no extensions are allowed.

New Law. Under the new law, for tax returns with tax years beginning after Dec. 31, 2015, the due date will be Apr. 15 with a maximum extension for a 6-month period ending on Oct. 15. The IRS may also waive the penalty for failure to timely request an extension for filing the FBAR for any taxpayer required to file it for the first time.

I hope this information is helpful. If you would like more details about these changes or any other aspect of the new law, please do not hesitate to call.

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    Howard L. Richshafer

    Howard Richshafer joined Wood + Lamping in 2008, and his practice is focused on civil and criminal tax problems, estate planning and probate, tax court trial work, mergers and acquisitions, and general corporate business matters. Howard is also a licensed Ohio CPA. Over the past 40 years, Howard has represented clients experiencing all types of civil and criminal tax problems with IRS. Those problems include IRS audits, IRS criminal investigations, enforced collection of unpaid tax liabilities involving levies, liens, and seizures of assets and income.

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