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We Heard You Loud and Clear on the Due Dates Issue

Tax Return Due DatesEvery voice is important to us.  So when the AICPA heard from so many of you a few years ago about the problems associated with the late receipt of Schedules K-1, we mobilized to come up with a solution.

After considerable dialogue, the AICPA submitted a proposal to Congress in October 2010 suggesting that the due dates for Forms 1065, 1120, 1120S, 1041 (along with some others) be shuffled around a bit--with the understanding that change can be difficult.  We know how important and ingrained return due dates are to tax professionals. Because members’ practices are so diverse and varied, and most members tend to have general practices, our volunteer leadership wanted to make changes that benefited the tax filing system as a whole.  We all understand how challenging the filing season can be.

After surveying 36,000 of our members (twice), a task force of AICPA members who were experts in individual, partnership, corporate, trust, and other tax disciplines brainstormed ways to not only address the problem for which we had received numerous complaints--the late receipt of  Schedules K-1-- but to create a solution that made sense from a big picture perspective. 

And it wasn’t just members in the individual tax preparation community who lent support.  Many in the partnership preparation community thought long and hard about the month-earlier switch and understood that having logically prioritized due dates would bring about certain economies of scale within most firms that would be beneficial in the long run.

Does it really make sense that the system requires the filing of parent returns, i.e., for C corporations or S corporations, before the flow-through returns that provided needed information?  After extensive deliberation over a dozen or so options, and after putting the task force’s thinking through an unprecedented level of discussion among members, state CPA societies, the IRS, the Treasury Department, and even state taxing authorities, the AICPA concluded that the holistic proposal submitted last fall was the best approach.  

Sure, staff scheduling, audit priorities, client notification, and other practice management issues would need to be evaluated and implemented. Some members fear that partnership extensions would encourage clients to further delay giving them the information they need; practitioners will need to make it clear that such returns will continue to be completed on the same time line as before (if March 15 is not possible). 

Change is never easy.  But the real winner here would be the millions of K-1 recipients who won’t need to worry about getting their information on time.  Members with diverse practices are also winners because of the shift in filing dates.  We believe the tax system as a whole will be well served.  We also understand that some of you may have some continuing concerns.  We need to hear those concerns and support you in a way that makes you successful.

As the celebrated college basketball coach John Wooden once said, “Do not let what you cannot do interfere with what you can.”  Members of Congress liked our suggestions and have started moving forward on legislation to fix the due date problem. We have succeeded in obtaining sponsors in both the House and Senate – S. 845 is sponsored by Senator Mike Enzi (R-WY) and HR 2382 is sponsored by Rep. Lynn Jenkins (R-KS).

Troy K. Lewis, CPA, Vice-President and Treasurer at Heritage Bank (Utah). Troy focuses on taxation and investment strategies and risk minimization.  He serves on the AICPA Tax Executive Committee and previously chaired the Partnership Taxation Technical Resource Panel, and also participated in the Due Date Task Force.  Lewis is the past President of the Utah Association of Certified Public Accountants and has a Master’s degree in Taxation from Brigham Young University.

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