On July 31, 2015, President Barack Obama signed into a law HR 3236 a highway funding bill. Buried in the Bill is a provision which changes the filing date for Foreign Bank Account Reports (FBARs) to April 15th. Up until now the due date for the FBAR, which must be filed electronically on FinCEN Form 114 (formerly TD F 90-22.1) was June 30th. The Bill also provides for an extension of time of up to 6 months to file the FBAR, making the extended due date October 15th. This reconciles the due date for the FBAR with the individual tax return filing date.
Before now many taxpayers were tripped up by the differences in the filing dates. Because many taxpayers go on extension for their tax returns, and don’t have extensive discussions with their CPAs, or other tax preparers, until shortly before the extended deadline of October 15th there were many instances of individuals not realizing they had a filing responsibility until after the June 30th deadline. Those taxpayers were usually stunned to find out that the extension of the filing date for their tax return did not extend the time to file their FBARs. This was a common sense fix to an unnecessary problem.
The Bill also authorizes a first time abate (FTA) procedure of sorts. Specifically the Bill states: “[f]or any taxpayer required to file such [FBAR] Form for the first time any penalty for failure to timely request for, or file, an extension may be waived by the Secretary.” This appears to provide authority to abate an FBAR penalty if the FBAR is filed after April 15th, but before October 15th, if this is the first time the FBAR was due. The language doesn’t really add anything to the law since the IRS already has wide latitude to waive FBAR filing penalties.
The Bill also changes due dates for partnership income tax returns, and C corporation tax returns. Previously the due date for calendar year C corporations was March 15th. The new due date is April 15th. Only a five month extension is available (until 2026) so the final due date for calendar year C corporation returns is still September 15th. C corporations with fiscal years ended June 30th would be able to get a seven month extension until 2026.
On the other hand calendar year partnerships will need to file by March 15th; a month sooner than currently required. A six month extension will be available.
Finally, the Bill overturns the Supreme Court’s decision in Home Concrete (Home Concrete & Supply LLC, 132 S. Ct. 1836 (2012)). That case dealt with the six year statute of limitations under Internal Revenue Code Section 6501(e)1)(1)(A) which provides for the longer statute of limitations where there is an omission from gross income in excess of 25%. The Supreme Court held that this rule did not apply in the case of basis overstatements. The Bill specifically amends Code Section 6501(e)(1) to provide that an omission from gross income includes an overstatement of basis. This is part of a disturbing trend by Congress which our tax attorneys have noticed to continue to increase the time the IRS has to assess additional taxes.
The Brager Tax Law Group is dedicated to providing strategic tax advice for serious tax problems. To schedule a tax consultation with one of our tax professionals call 800-380-TAX-LITIGATOR today or contact us online