August 2015 Tax Snacks

snacks

Tax Snacks: Bite-size tax news and information on the fly

Dates to Remember

September 15:

• Extended calendar year corporate tax returns are due.
• Extended calendar year partnership tax returns are due.
• Extended calendar year trust returns are due.
• Third quarter estimated tax payments for individuals, corporations and trusts are due.

(In other words, everything is due all at once, and your tax accountant is not getting much sleep.)

Big changes possible for transferors of family businesses

If you have been actively planning for or strongly considering transferring your interest in a family owned business to another family member, now may be the time to effectuate such transfers. It is anticipated that the IRS will soon issue regulations limiting the use of valuation discounts for intra family transfers of closely held business entities. From the American Bar Association’s Section of Taxation meeting in May, it was reported that an advisor in the U.S. Treasury Department’s Office of Tax Policy indicated that proposed regulations could be released prior to mid-September 2015. It is unclear how extensive the regulations will be in terms of the types of businesses and the precise circumstances implicated. Holding companies of passive investments such as real estate and marketable securities are likely targets; it is uncertain if regulations would likewise attempt to limit discounts of true operating businesses. It is probable that the changes will be effective as of the date that the proposed regulations are issued, so time is of the essence for finalizing any planned transactions.

IRS ID theft much larger than thought

Your editor remains hopeful that if his identity is stolen, the hackers also will assume his mortgage payments, but that’s probably not how it works. All joking aside, in previous Tax Snacks, we shared news of a data breach at the IRS that was believed at the time to have jeopardized the records of more than 100,000 taxpayers. This month, the IRS reports that a more accurate assessment is that 220,000 taxpayers’ records may have been accessed by hackers, and another 170,000 could be at risk even though hackers’ efforts to collect their data appear to be unsuccessful. More information can be found here.

Filing deadline changes

The most obvious place to look for tax law changes might not be in legislation addressing highway and transportation funding or veteran’s health benefits, but that’s exactly where news of some new tax return filing deadlines were found a few weeks ago. As noted in a recent blog post by BNN’s Drew Cheney, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 sets in motion several changes that will be applicable in early 2017. Among them: Corporate Forms 1120 and partnership Forms 1065 historically have been due on March 15 and April 15, respectively; and these dates are being swapped, such that partnership filings are due in March and corporate returns are due in April. S corporation returns (Forms 1120S) will remain due on March 15. The purpose for the swap? With this change, returns that produce Schedules K-1 are due a month before individual returns (Forms 1040) are due, hopefully alleviating some of the April 15 time crunch.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.