August 1, 2015

On July 31, 2015, President Obama signed into law H.R. 3236, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015”, which, among other issues, changes the due dates for partnership and C corporation’s tax returns, several common tax returns, the FBAR and overrules the Supreme Court’s Home Concrete & Supply, LLC decision.

NEW FBAR FILING DUE DATES

The new due date for FinCEN Form 114 a/k/a the FBAR, is changed from June 30 to April 15, and taxpayers will be allowed a six-month extension to October 15. For any taxpayer required to file an FBAR for the first time, any penalty for failure to timely request for, or file an extension, may be waived by the IRS.

This change becomes effective for the 2016 FBAR which is due in 2017, so the FBAR filing due date for the 2015 FBAR will still be June 30, 2016.

6-YEAR STATUTE OF LIMITATIONS IN CASE OF OVERSTATEMENT OF BASIS

In Home Concrete & Supply, LLC, 132 S. Ct. 1836 (2012), the Supreme Court ruled against the IRS and held that the extended six-year statute of limitation under Code § 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.

Code § 6501(e)(1)(B) has therefore now been amended to add: “An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income.” The change applies to returns filed not only as of July 31, 2015 but as well to previously filed returns for which the applicable statute of limitations remains open under Code § 6501.

The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.