OUR THOUGHTS ON:

2009 Automatic Filing Extensions

Estate Planning

By Melanie LaSota

2009 Automatic Filing Extensions for Partnerships, Trusts and Estates Reduced to Five Months

The Internal Revenue Service has issued temporary regulations reducing the extension period from six months to five months for partnership, estate and trust returns. The IRS reasoned that a shorter extension period for these entities will reduce the overall tax burden since many individuals require information from these types of entities to complete their own returns.

Although the temporary regulations do not directly affect the existing rules on corporate return extensions, they may indirectly put a crunch on their timetable. Calendar year S Corporations which issue K-1s to trust or estate shareholders may no longer be able to complete the corporate tax return on the September 15th deadline. Trusts and estates which are shareholders in an S-corporation will need the information contained on the corporate K-1 to file its own return. If the trust or estate shareholder does not receive the needed income information from a corporation before the common due date, the trust and estate either will have to file using estimates of income and then file an amended return after receiving the corporate tax return information or even file a late return. Although this may have happened under the current law, it could occur more frequently now. Tax preparers may need to have the S corporation tax return completed well in advance of the IRS’ due date.

Unsure of the impact of these regulations, the IRS has requested comments on whether the five-month extension of time to file for these partnerships, trusts and estates increases or reduces overall taxpayer burden.

The new regulations can be found by clicking the following:
Relating to Partnerships
Relating to Estates and Trusts

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