IRS adjusts due dates for partnerships

Written on Dec 08, 2017

The IRS has issued a notice providing more time for partnerships, real estate mortgage investment conduits and some other types of businesses to file their returns.

Notice 2017-71 provides that any act performed for the 2016 taxable year of a partnership, REMIC, or certain other entities will be treated as timely for all purposes under the Tax Code, except with respect to interest, if the act would have been timely if the Surface Transportation Act had not changed the due date for partnership returns.

The due date changes with the most impact will likely be those changes for Partnership tax returns (Form 1065) and C Corporation tax returns (Form 1120). Essentially the due dates have swapped, with Partnership returns due March 15 and C Corporation returns due April 18. The significant reorganization of due dates is intended to assist individuals involved in pass-through entities in receiving information required to prepare their individual returns in a more timely fashion.

Also new for tax year 2016 (reporting in 2017), the foreign bank reporting on FinCEN 114 (FBAR) is due on the same date as the individual tax return, Form 1040, and is eligible to be extended to the individual extended deadline, Oct. 16.

Whenever a regular tax filing date falls on a Saturday, Sunday, or a legal observed holiday in DC, the due date for returns is pushed to the next business day.  In 2017, several due dates will be adjusted because of this rule: The Individual and FBAR due date and extension due date, the new C Corporation due date and the Form 1041 due date and extended due date.

For fiscal year filers:

Partnership and S Corporation tax returns will be due the 15th day of the third month after the end of their tax year. The filing date for S Corporations is unchanged.

C Corporation tax returns will be due the 15th day of the fourth month after the end of the tax year. A special rule to defer the due date change for C Corporations with fiscal years that end on June 30 defers the change until December 31, 2025 – a full ten years.

Employee Benefit Plan tax returns are due the last day of the seventh month after the plan year ends.

It is important to check when tax returns are due for all states in which taxpayers operate, because individual states may not conform to the Federal filing dates. In addition, please keep in mind that the same holiday and weekend due date adjustments apply for Federal filing.

Changes include:

Filers of U.S. Return of Partnership Income (Form 1065) will have a longer extension period, a maximum of six months, rather than the current five-month extension, leaving the former (2015 and prior years) extended due date in place (September 15th for calendar year taxpayers).

U.S. Income Tax Return for Estates and Trusts (Form 1041) will have a maximum extension of five and a half months, two weeks longer than the former (2015 and prior years) five-month extension.

Annual Return/Report of Employee Benefit Plans will have a maximum automatic extension of three and a half months.

Report of Foreign Bank and Financial Accounts (FinCEN 114, FBAR) will be due on the same due date as the individual Form 1040 and permitted to extend for six months, thus aligning the FBAR reporting with the individual tax return reporting. Additionally, the IRS may waive the penalty for failure to file a timely extension request for any taxpayer required to file for the first time.

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