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New tax law changes FBAR filing due date

posted Aug 9, 2015, 2:02 PM by Zaher Fallahi

On July 31, 2015, President Barak Obama signed into law a new bill, which in pertinent sections contains provisions that impact taxpayers and tax professionals alike, including tax return or forms due date filing as follows:

1-      Form 1120, US Corporation Income Tax Return. C Corporations will be allowed a six-month extension, except that calendar year corporations would get a five-month extension until 2026 and corporations with a June 30 year end would get a seven-Month extension until 2026. The new due dates will apply to returns for tax years beginning after Dec. 31, 2015. However, for C corporations with fiscal years ending on June 30, the new due dates will not apply until tax years beginning after Dec. 31, 2025.

2-      Form 1065, U.S. Return of Partnership Income, the new due date is 15th day of the third month of the following year. For calendar-year partnerships, the date is March 15th day of the following year. A maximum of six-month extension will be allowed. Currently, these returns are due on April 15th.

3-      Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, is due April 15 of the following year with a maximum extension of six months.  This Form is filed separately and is not part of the regular tax return.

4-      Foreign Bank Account Report (FBAR), also known as Report of Foreign Bank and Financial Accounts, Form FinCEN 114 (formerly TD F 90-22.1), the due is April 15th, and the act allows an extension of six months through October 15th. Under the current law, the due date for filing Form FinCEN 114 is June 30th of the following year and no extensions allowed. It is required to be e-filed since July 1, 2013, even the prior years’ FBARs.

5-      Form 3520-A. Annual Information Return of a Foreign Trust With a U.S. Owner. The act allows a six-month extension.

6-      Form 1041, U.S. Income Tax Return for Estates and Trusts, allows an extension of 5 1/2 months.  

7-      Form 5500, Annual Return/Report of Employee Benefit Plan, allows an extension of 3 1/2 months.

8-       Form 990, Return of Organization Exempt From Income Tax. An extension of six months allowed.

9-      Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the IRC. An extension of six months allowed.

10-   Form 5227, Split-Interest Trust Information Return. An extension of six months allowed.

11-   Form 6069, Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction.  An extension of six months allowed.

12-   Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts. An extension of six months allowed.

13-   Information of filing Form 1098-Mortgage Interest. Section 6050H is amended to require new information on the mortgage information statements that are required to be sent to individuals who pay more than $600 in mortgage in a year. These statements will now be required to report the outstanding principal on the loan amount at the beginning of the calendar year, the address of the property securing the loan, and the mortgage origination date. This change applies to returns and statements due after Dec. 31, 2016.

14-   Home Concrete case overruled. In Home Concrete & Supply, LLC, 132 S. Ct. 1836 (2012), the US Supreme Court held that the IRS six-year statute of limitation under Section 6501(e) (1) (A), which applies when a taxpayer “omits from gross income an amount properly includible” in excess of 25% of gross income, does not apply when a taxpayer overstates its basis in property it has sold. The act amends Section 6501(e) (1) (B) to state: “An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income.” This means that understatement of income with respect to application of the 25% rule is the same even if caused by overstatement of the basis of property sold. This applies to tax returns filed subsequent the date of enactment as well as previously filed returns that are still open under this section.

15-   Basis reporting between estates and beneficiaries. The new law amends Sec. 1014 to require beneficiaries inheriting from a decedent show the same basis reported by the estate tax return Form 706. It also creates a new Sec. 6035, which requires executors responsible for filing the Form 706, report the basis included in 706 to the IRS and all beneficiaries.

Zaher Fallahi, is both a CPA and a Tax Attorney and, practices as an IRS Defense Tax Attorney and assists taxpayers including Americans Living Abroad and Non-Resident Aliens subject to the US tax law, in resolving their tax controversies with respect to their Offshore Voluntary Disclosure Program (OVDP), Report of Foreign Bank and Financial Accounts (FBAR), Foreign Account Tax Compliance Act (FATCA) and Foreign Trust.  Telephones: (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), e-mail taxattorney@zfcpa.com

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