New Law Changes Tax Return and FBAR Due Dates and Broadens Six-Year Statute of Limitations

Posted by Mary McNulty and Lee Meyercord           The Surface Transportation and Veterans Health Care Choice Improvement Act (the “Act”) (available here), enacted at the end of July, modified the due dates for certain tax returns and broadened the six-year statute of limitations by overruling the Supreme Court’s decision in Home Concrete.Modified Tax Return Due DatesThe Act modifies the due dates for many frequently filed tax returns.  Most notably, the Act switches the due dates for pass-through entity returns and corporations.  Tax returns for partnership and S corporations will be due March 15 (or the 15th of the third month after the end of the fiscal year) instead of April 15.  Corporate tax returns will be due April 15 (or the 15th of the fourth month after the end of the fiscal year) instead of March 15.  The earlier tax return due dates for pass-through entities will allow individual and corporate taxpayers time to include information from the pass-through entity’s return on their returns.  The automatic extension rules remain unchanged.  Therefore, partnership returns filed on extension will be due on September 15, whereas corporate returns filed on extension will be due on October 15.  These changes apply to tax years beginning after December 31, 2015 – and thus to 2016 returns – except for corporations with fiscal years ending on June 30.  For those corporations, the new due dates do not apply until tax years beginning after December 31, 2025.   The Act also modified the due date for FBARs (FinCEN Report 114, Report of Foreign Bank and Financial Accounts) to April 15 from June 30, which makes the due date the same as individual and now corporate tax returns.  These changes apply to “returns for taxable years beginning after December 31, 2015.”  Therefore, 2015 FBARs will still be due on June 30, 2016.  But 2016 FBARs will be due on April 15, 2017 and, for the first time, can be extended to October 15.Broadened Six-Year Statute of Limitations by Overruling Home ConcreteThe Act overrules the Supreme Court’s decision in United States v. Home Concrete & Supply, LLC (discussed here) by amending Section 6501(e)(1)(B) to provide that an understatement of gross income due to an overstatement of basis is an omission from gross income that may trigger the six-year statute of limitations.  Section 6501(e)(1)(B) applies to returns filed after July 31, 2015 and returns filed on or before July 31, 2015 if the statute is still open (without regard to amended Section 6501(e)(1)(B)).
If you have any questions about the modified tax return and FBAR due dates or Section 6501(e)(1)(B), please contact one of us or any of the other Tax lawyers at Thompson & Knight.