The Internal Revenue Service has issued Notice 2016-27, effective March 23, 2016, which once again delays the filing requirement of Form 8971 and accompanying Schedule A. Executors that are required to file or furnish such statement(s) prior to June 30, 2016 don’t need to do so until June 30, 2016.
The filing requirement was originally imposed by Section 6035 of the “Highway Bill” (Surface Transportation and Veterans Health Care Choice Improvement Act of 2015), which was signed into law in the summer of 2015 and now requires beneficiaries of estates to use the finally determined estate tax value of any property they receive as their income tax basis and imposes a reporting obligation on executors to provide such values to the IRS and the beneficiaries. The original filing deadline was previously extended until February 29, 2016 and a second time until March 31, 2016.
This newest delay comes on the heels of the recently published proposed regulations under Internal Revenue Code Sections 1014(f) and 6035. The notice cites numerous comments received by the Treasury Department and the IRS as the reason for this most recent extension. Those comments provide that “executors and other persons have not had sufficient time to adopt the systematic changes” that would allow for an accurate filing of Form 8971 and Schedule A. As the proposed regulations seem to clarify some issues raised by practitioners and commentators while stirring up new ones, more delays may be on the horizon.