Under existing rules, taxpayers are generally permitted an automatic 30-day extension to file information returns, including the W-2 Form series. Those receiving an automatic extension are further permitted to apply for an additional 30-day extension. However, recently proposed and temporary regulations are designed to severely curtail these extensions - a serious blow particularly for business taxpayers.
The elimination of automatic extensions and the narrowing of the criteria for extensions with permission will make compliance with the information reporting rules that much harder for business taxpayers. This shortening of the filing period comes on top of a recent change in legislation to drastically increase the penalties for late filing of information returns.
For W-2 extensions, the ability to file for an automatic extension will be eliminated on December 31, 2016. Instead, a single 30-day extension will be available by application for the 2017 filing season and later. The IRS has warned taxpayers that grants of extensions after 2016 will be limited to extraordinary circumstances or catastrophes. The change in the extension procedures is being made to help the IRS combat identity theft.
The IRS has stated that it intends to eventually eliminate automatic extensions for all information returns and replace them with a single, non-automatic 30-day extension. However, this change will not be effective earlier than December 31, 2017.
Questions? Contact your Berdon advisor.
Berdon LLP, New York Accountants