The Highway Funding Bill Modifies Tax Return Due Dates

On July 31, 2015 the President signed into law the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.  While the law is not focused on tax reform, Congress did take the opportunity to insert provisions changing many tax return due dates and tax extension lengths.  The effective date of these changes is for taxable years beginning after December 31, 2015.  Therefore, for most taxpayers the provisions will apply to 2016 tax returns due in 2017.  The law also provides for a consistency requirement in the tax basis of inherited property between an estate and its beneficiaries.  This provision is effective for estate returns filed after the enactment date of the law (July 31, 2015).

Change in Due Dates

Partnerships:  For partnership returns, the due date has changed from April 15th to March 15th   (for calendar year partnerships), and the 15th day of the third month following the close of the tax year (for fiscal year partnerships).

C Corporations:  For C corporation returns, the due date has changed from March 15th to April 15th (for calendar year C corporations), and the 15th day of the fourth month following the close of the tax year (for fiscal year C corporations). With one exception, this provision becomes effective for taxable years beginning after December 31, 2015.  However, for C corporations with fiscal years ending on June 30th, the new due date becomes effective 10 years later, for taxable years beginning after December 31, 2025.

Report of Foreign Bank and Financial Accounts (FBAR) FINCEN114:  The deadline for FBAR filings has changed from June 30th to April 15th.  This will conform to the individual income tax return filing deadline of April 15th, and is an attempt by Congress to make the FBAR a more “normal” filing.

Modification of Extension Provisions:  Under the law several extension lengths have been adjusted.

  • Partnerships—The partnership extension has been increased from 5 months to 6 months. This means calendar year partnerships will have an extended due date of September 15th.
  • Form 1041 Filings for Trusts and Estate—The Form 1041 extension has been increased from 5 months to 5 ½ months. This will provide an extended due date of September 30th.
  • C Corporations—C corporations with a calendar year-end are granted a 5 month extension for tax years beginning before January 1, 2026; after January 1, 2026, the extension is increased to 6 months. Fiscal year C corporations, other than those with a June 30th year-end, a granted a 6 month extension.  C corporations with a June 30th year-end are given a 7 month extension for tax years beginning before January 1, 2026, and thereafter are given a 6 month extension.
  • FBAR Reporting—For the first time, the law provides a 6 month extension to October 15th. Previously, FBAR filings could not be extended.
  • Form 5500 Employee Benefit Plans—For employee benefit plans, the extension has been increased from 2 ½ months to 3 ½ months, providing an extended due date of November 15th for calendar year filers.
  • Form 990 for Tax-Exempt Organizations—Exempt organizations are now granted an automatic 6 month extension, providing an extended due date of November 15th for calendar year filers. Currently, an exempt organization is granted an automatic 3 month extension, and then must request an additional 3 month extension.
  • Other Miscellaneous Extension Provisions: For Forms 4720, 5227, 6069, 8870, 3520, and 3520-A, the law provides for an automatic 6-month extension.

Consistent Basis Reporting Between Estate and Person Acquiring Property from Decedent

The new law requires that inherited property cannot have a higher basis than the basis reported by the estate for estate tax purposes.  The law adds Section 6035, which requires the executor of an estate to provide information returns to the IRS and the beneficiaries providing the value of the inherited property.  Contact  Steven Bokiess

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