Accountants petitioned Congress to stagger tax deadlines for partnerships, S corporations and some other types of limited liability businesses, with the goal of improving the flow of information for other entities that need the data for their own returns.
The American Institute of Certified Public Accountants formally filed the request in October to two Congressional committees. The changes would not affect the traditional April 15 IRS deadline for individuals, nor their Oct. 15 extension deadline.
AICPA”™s request now heads to the U.S. Senate Committee on Finance and the House Ways and Means Committee, whose members include U.S. Rep. John Larson of Hartford.
At deadline, the Connecticut Society of CPAs had yet to respond to a query on whether the group would recommend the state adjust its own deadlines to coincide with any IRS changes.
“Our recommendation is only for federal purposes,” said Hughlene Burton, a University of North Carolina Charlotte professor who is leading AICPA”™s efforts. “We did run our proposal by state agencies but we did not suggest any changes. It would be up to the states to determine if they wanted to change their rules.
“I think the (accounting) rank and file may not be aware of the proposal yet,” she added.
AICPA wants the tax deadline for partnerships pushed up a full month to March 15, from the current deadline of April 15; while the deadline for extensions would remain Sept. 15.
S corporations would see their deadlines pushed back two weeks, with returns due on March 31 rather than March 15, and extensions due on Sept. 30 rather than the current drop-dead date of Sept. 15.
AICPA says the changes are needed due to the growing number of businesses that since 1997 have taken advantage of IRS “check the box” regulations, which encourages businesses to organize in partnership or S corporation form. The organization polled some 30,000 of its members to determine the optimal schedule for various IRS forms.
By putting partnerships at the head of the line, partners can get needed K-1 schedules representing their investments in advance of their April 15 tax deadline. Similarly, by having S corporations file two weeks later, they would be able to furnish K-1 schedules to their shareholders.
Once partnership and S-corporation returns have been filed, individuals, trusts and C corporations will all have the information they need from their “pass-through” investments to file their own returns on April 15. The due date for employee benefit plans would remain July 31, but those plans would see their extension deadline pushed back a month to Nov. 15.
“Since March of this year, there have been five new tax acts, and we as accounting firms have to assimilate all the changes,” said Randy Schwartzman, an accountant with BDO USA L.L.P., which is in the process of opening a new office in Greenwich. “You can”™t get a K-1 two days beforehand and expect to get it done.”
In mid-October, The IRS announced it would defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011. Employers say they need additional time to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement ”“ the amounts reported are not taxed.