Tax return due dates to change for tax years beginning after 2015
TAX ALERT |
To help pay for a three-month extension of the Highway Trust Fund, President Obama signed legislation on July 31, 2015, that includes several new tax compliance requirements, including provisions changing the tax return filing deadlines for many taxpayers, generally only effective beginning with returns filed in 2017. The primary compliance measures are as follows:
- Change the tax-filing deadlines for calendar year businesses. For tax years that begin after Dec. 31, 2015, returns of calendar-year C corporations will be due April 15 (rather than March 15) and returns of calendar-year partnerships will be due March 15 (rather than April 15). Calendar-year S corporation returns will continue to be due March 15.
- Change the tax-filing deadline for fiscal year businesses. The due dates for fiscal year filers also are changing, with most C corporations due on the fifteenth day of the fourth month following the end of their fiscal year, and S corporations and partnerships due on the fifteenth day of the third month. Again, this provision is generally effective for tax years beginning after Dec. 31, 2015. Interestingly, there is an exception for C corporations with a fiscal year ending on June 30. In those cases, the effective date of these changes is delayed until the first taxable year beginning after Dec. 31, 2025.
- Additional disclosure for estates. Estates with a positive estate tax liability are now required to report the value of specific items of property, both to the IRS and to beneficiaries. This is intended to prevent beneficiaries from overstating basis upon a subsequent disposition of the property. The legislation includes penalty provisions for any such overstatements. These disclosure requirements are effective for estates filing Form 706 after July 31, 2015.
- Require lenders to provide additional information on outstanding mortgages. In addition to reporting a borrower's name, address, taxpayer identification number and interest paid, as required by current law, lenders will be required to start providing additional information to the IRS on Form 1098, Mortgage Interest Statement, beginning in 2017, including the loan origination date, the outstanding principal and the property's address.
- Modify the rules regarding the statute of limitations with respect to understatements caused by overstatements of basis. A recent Supreme Court ruling found that substantial understatements of tax caused by an overstatement of basis are not subject to the six-year statute of limitations on assessments, but instead are subject to the normal three-year statute. This provision modifies the law to provide that such understatements are now subject to the longer statute. This provision is effective for returns filed after July 31, 2015, as well as for returns filed prior to enactment with respect to which the statute of limitations is otherwise still open.
Addressing the shortfall in the highway trust fund has been a priority for Congress over the past month and has kept them from addressing other legislative items such as the various tax provisions that expired at the end of 2014 (bonus depreciation, research and development credit, etc.). Now that this issue has been addressed, at least in the short-term, it will be interesting to see whether addressing the expired tax provisions becomes a priority.