Automatic Extensions Kept on Many Information Returns Other Than Form W-2 Series

(Parker Tax Publishing August 2018)

On August 3, the IRS finalized proposed regulations for requesting automatic and non-automatic extensions of time to file certain information returns. While the proposed regulations would have removed the automatic 30-day extension of time to file all information returns subject to the rules under former Reg. Sec. 1.6081-8 and would have provided a single non-automatic 30-day extension of time to file those information returns, the IRS adopted the proposed regulations only with respect to the removal of the automatic extension of time to file the Form W-2 series (except Form W-2G) and forms reporting nonemployee compensation (currently Form 1099-MISC, Miscellaneous Income, with information in box 7) and retained the automatic extension of time to file numerous other information returns. T.D. 9838.

Background

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act), amended Code Sec. 6071 to change the due date for filing Form W-2, Wage and Tax Statement, and any returns or statements required by the IRS to report nonemployee compensation. The amendments applied to information returns for calendar years beginning after 2015.

Before enactment of the PATH Act, the Form W-2 was required to be filed by the last day of February (February 28 if amounts were not subject to the Federal Insurance Contribution Act), or March 31 if filed electronically. Also, before the enactment of the PATH Act, the form reporting nonemployee compensation, Form 1099-MISC, was required to be filed by February 28, or March 31 if filed electronically. As amended by the PATH Act, Code Sec. 6071 provides that the due date for filing the Form W-2 and any returns or statements required by the IRS to report nonemployee compensation is January 31 of the calendar year following the calendar year for which the information is being reported, regardless of whether these information returns are filed on paper or electronically. Code Sec. 6081(a) generally provides that the IRS may grant a reasonable extension of time, not to exceed six months, for filing any return, declaration, statement, or other tax document. The regulations under Code Sec. 6081 generally provide rules for extensions of time to file returns. Reg. Sec. 1.6081-8 provide specific rules for extensions of time to file certain information returns.

In August of 2015, the IRS issued temporary and proposed regulations under Code Sec. 6081. The regulations were aimed at improving the IRS's ability to use third-party information returns to combat identity theft and refund fraud. The temporary regulation under Reg. Sec. 1.6081-8T, which replaced Reg. Sec. 1.6081-8 for requests for extension of time to file certain information returns due after December 31, 2016, removed information returns in the Form W-2 series (except Form W-2G) from the list of information returns eligible for the automatic 30-day extension of time to file and instead provided a single non-automatic 30-day extension of time to file those information returns.

In Reg. Sec. 1.6081-8T(a), the IRS retained the rules under former Reg. Sec. 1.6081-8 for obtaining an automatic 30-day extension of time to file Form W-2G, Form 1042-S, Form 1095-B, Form 1095-C, Form 8027, the Form 1097 series, Form 1098 series, Form 1099 series, and Form 5498 series. It also retained the additional non-automatic 30-day extension of time to file these information returns.

In addition, the temporary regulations updated the list of information returns eligible for automatic and non-automatic extensions of time to file by adding Form 1094-C, Form 3921, and Form 3922 to the list in Sec. 1.6081-8T(a). According to the IRS, the addition of these forms merely updated the list to reflect current practice at the time the temporary regulations were published.

The proposed regulations, however, were broader than the temporary regulations in that they proposed to remove the automatic extension of time to file Forms 1042-S, 1094-C, 1095-B, 1095-C, 3921, 3922, and 8027; to remove the automatic extension of time to file the Form W-2 series (including Form W-2G), Form 1097 series, Form 1098 series, Form 1099 series, and Form 5498 series; and to allow only a single non-automatic 30-day extension of time to file all of these information returns. The proposed non-automatic extension would have been available on the same terms as the non-automatic extension for the Form W-2 series in the temporary regulations. The preamble to the proposed regulations provided that removal of the automatic extension would not apply to information returns (other than the Form W-2 series except Form W-2G) due any earlier than January 1, 2018.

Final Regulations

In T.D. 9838, after considering the comments on the regulations, the IRS adopted the proposed regulations only with respect to the removal of the automatic extension of time to file the Form W-2 series (except Form W-2G) and forms reporting nonemployee compensation (currently Form 1099-MISC, Miscellaneous Income, with information in box 7). The final regulations retain the automatic extension of time to file the following returns: Form W-2G, Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, Form 1095-B, Health Coverage, Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, Form 3921, Exercise of an Incentive Stock Option Under Section 422(b); Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c); and Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips; the Form 1097 series, the Form 1098 series, the Form 1099 series (except forms reporting nonemployee compensation), and the Form 5498 series.

For a discussion of the extensions of time for filing information returns, see Parker Tax ¶252,503.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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