Td 9838

Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations
collection of information, including
suggestions for reducing the burden, to
Jasmeet K. Seehra, Office of
Management and Budget, by email at
[email protected] or by fax to (202)
395–7285.
3. This rule does not contain policies
with Federalism implications as that
term is defined under Executive Order
13132.
4. The provisions of the
Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed
rulemaking and the opportunity for
public participation, and a delay in
effective date, are inapplicable because
this regulation involves a military or
foreign affairs function of the United
States (see 5 U.S.C. 553(a)(1)). This rule
implements a necessary update of the
status of South Sudan as a U.S.
embargoed country, consistent with the
prohibitions implemented in the ITAR

by the Department of State. This rule
also serves to prevent confusion by the
public as to the current EAR export and
reexport license requirements
applicable to South Sudan. A delay in
the effective date would frustrate the
achievement of this goal. Further, no
other law requires that a notice of
proposed rulemaking and an
opportunity for public comment be
given for this rule. Because a notice of
proposed rulemaking and an
opportunity for public comment are not
required to be given for this rule under
5 U.S.C. 553, or by any other law, the
requirements of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) are
not applicable.

*

DEPARTMENT OF THE TREASURY

*

*

*

Administrative practice and
procedure, Exports, Reporting and
recordkeeping requirements.

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1. The authority citation for part 740
continues to read as follows:

■

Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C.
1701 et seq.; 22 U.S.C. 7201 et seq.; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001
Comp., p. 783; Notice of August 15, 2017, 82
FR 39005 (August 16, 2017).

2. Amend Supplement No. 1 to Part
740 by adding, in alphabetical order, an
entry for ‘‘South Sudan, Republic of’’
under ‘‘Country Group D’’ to read as
follows:

■

SUPPLEMENT NO. 1 TO PART 740—
COUNTRY GROUPS
*

*

*

*

*

Final regulations and removal of
temporary regulations.

ACTION:

This document contains final
regulations providing rules regarding
the automatic and non-automatic
extension of time to file certain
information returns. These changes are
being implemented to accelerate the
filing of the Form W–2 series (except
Form W–2G) and forms that report
nonemployee compensation (currently
Form 1099–MISC with information in
box 7) so they are available earlier in the
filing season for use in the IRS’s identity

SUMMARY:

26 CFR Part 1
[TD 9838]

BILLING CODE 3510–33–P

RIN 1545–BM49

Extension of Time To File Certain
Information Returns
Internal Revenue Service (IRS),
Treasury.

AGENCY:

23:08 Aug 02, 2018

PART 740—[AMENDED]

Internal Revenue Service

[FR Doc. 2018–16612 Filed 8–2–18; 8:45 am]

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Accordingly, part 740 of the Export
Administration Regulations (15 CFR
parts 730–774) is amended as follows:

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ER03AU18.002

*

Dated: July 26, 2018.
Richard E. Ashooh,
Assistant Secretary for Export
Administration.

List of Subjects in 15 CFR Part 740

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theft and refund fraud detection
processes. In addition, these final
regulations update the list of
information returns subject to the rules
regarding extensions of time to file.
These regulations affect filers requesting
an extension of time to file the affected
information returns.
DATES: Effective date: These regulations
are effective on August 3, 2018.
Applicability date: For dates of
applicability, see § 1.6081–8(g).
FOR FURTHER INFORMATION CONTACT:
Jonathan R. Black, (202) 317–6845 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to 26 CFR part 1 under section 6081 of
the Internal Revenue Code (Code)
regarding the extension of time to file
certain information returns. On August
13, 2015, the IRS published in the
Federal Register temporary regulations
(TD 9730 (80 FR 48433)) under
§ 1.6081–8T removing the automatic 30day extension of time to file the Form
W–2 series (except Form W–2G,
‘‘Certain Gambling Winnings’’) and
providing a single non-automatic 30-day
extension of time to file these forms.
The temporary regulations also updated
the list of information returns eligible
for an extension of time to file. The
temporary regulations were applicable
for requests for extension of time to file
information returns due after December
31, 2016. The temporary regulations
were set to expire August 10, 2018, but
they are removed by this Treasury
Decision.
A notice of proposed rulemaking
(REG–132075–14 (80 FR 48472)) crossreferencing the temporary regulations
was published in the Federal Register
the same day the temporary regulations
were published. The notice of proposed
rulemaking contains proposed
regulations that would remove the
automatic 30-day extension of time to
file all information returns subject to the
rules formerly under § 1.6081–8 and
provide a single non-automatic 30-day
extension of time to file those
information returns. The IRS received
comments on the notice of proposed
rulemaking, but no public hearing was
requested or held. After consideration of
the comments, this Treasury Decision
adopts the proposed regulations only
with respect to the removal of the
automatic extension of time to file the
Form W–2 series (except Form W–2G)
and forms reporting nonemployee
compensation (currently Form 1099–
MISC, ‘‘Miscellaneous Income,’’ with
information in box 7). The automatic

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extension of time to file is retained for
Form W–2G, Form 1042–S, ‘‘Foreign
Person’s U.S. Source Income Subject to
Withholding,’’ Form 1094–C,
‘‘Transmittal of Employer-Provided
Health Insurance Offer and Coverage
Information Returns,’’ Form 1095–B,
‘‘Health Coverage,’’ Form 1095–C,
‘‘Employer-Provided Health Insurance
Offer and Coverage,’’ Form 3921,
‘‘Exercise of an Incentive Stock Option
Under Section 422(b),’’ Form 3922,
‘‘Transfer of Stock Acquired Through an
Employee Stock Purchase Plan Under
Section 423(c),’’ and Form 8027,
‘‘Employer’s Annual Information Return
of Tip Income and Allocated Tips,’’ the
Form 1097 series, Form 1098 series,
Form 1099 series (except forms
reporting nonemployee compensation),
and Form 5498 series.
I. Extension of Time To File
Information Returns
Section 6081(a) generally provides
that the Secretary may grant a
reasonable extension of time, not to
exceed 6 months, for filing any return,
declaration, statement, or other
document required by Title 26 or by
regulation. The regulations under
section 6081 generally provide rules for
extensions of time to file returns. The
regulations under § 1.6081–8 provide
specific rules for extensions of time to
file certain information returns.
For requests for extension of time to
file information returns due before
January 1, 2017, § 1.6081–8 provided
that a person required to file certain
information returns (the filer), or the
person transmitting the return for the
filer (the transmitter), could request an
automatic 30-day extension of time to
file those information returns by filing
a Form 8809, ‘‘Application for
Extension of Time to File Information
Returns’’ on or before the due date of
the information return. A filer or
transmitter was not required to sign the
Form 8809 or provide an explanation to
request the automatic 30-day extension.
Prior to expiration of the automatic
30-day extension period, a filer or
transmitter that obtained an automatic
30-day extension of time to file could
request an additional non-automatic 30day extension of time to file. Under
§ 1.6081–8, the IRS had the discretion to
grant this request if the IRS determined
that a further extension was warranted.
Unlike a request to obtain an automatic
extension, a request for a non-automatic
extension was required to be signed by
the filer or transmitter under penalties
of perjury and include an explanation of
why an additional extension of time to
file was needed. No further extensions

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of time to file were permitted under
§ 1.6081–8.
II. Temporary and Proposed
Regulations
Identity theft and refund fraud are
persistent and evolving threats to the
nation’s tax system. They place an
enormous burden on the tax system and
taxpayers. Identity thieves and
unscrupulous preparers often claim
refunds by electronically filing
fraudulent tax returns early in the tax
filing season. The IRS uses third-party
information returns to increase
voluntary compliance, verify accuracy
of tax returns, improve collection of
taxes, and combat fraud, including
refund fraud committed by those using
the stolen identities of legitimate
taxpayers. Accelerating the receipt of
third-party information returns is one
way to better enable the IRS to identify
and stop fraudulent refund claims
before they are paid.
On August 13, 2015, temporary and
proposed regulations under section
6081 were published in the Federal
Register to improve the IRS’s ability to
use third-party information returns to
combat identity theft and refund fraud.
The temporary regulation under
§ 1.6081–8T, which replaced the
regulation under § 1.6081–8 for requests
for extension of time to file certain
information returns due after December
31, 2016, removed information returns
in the Form W–2 series (except Form
W–2G) from the list of information
returns eligible for the automatic 30-day
extension of time to file and instead
provided a single non-automatic 30-day
extension of time to file those
information returns.
Section 1.6081–8T(a) retained the
rules under § 1.6081–8 for obtaining an
automatic 30-day extension of time to
file Form W–2G, Form 1042–S, Form
1095–B, Form 1095–C, Form 8027, the
Form 1097 series, Form 1098 series,
Form 1099 series, and Form 5498 series.
It also retained the additional nonautomatic 30-day extension of time to
file these information returns.
In addition, the temporary regulations
updated the list of information returns
that are eligible for automatic and nonautomatic extensions of time to file by
adding Form 1094–C, Form 3921, and
Form 3922 to the list in § 1.6081–8T(a).
As explained in the preamble to the
temporary regulations, the addition of
these forms merely updated the list to
reflect current practice at the time the
temporary regulations were published.
The proposed regulations were
broader than the temporary regulations.
The notice of proposed rulemaking
proposed to remove the automatic

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extension of time to file Forms 1042–S,
1094–C, 1095–B, 1095–C, 3921, 3922,
and 8027; to remove the automatic
extension of time to file the Form W–
2 series (including Form W–2G), Form
1097 series, Form 1098 series, Form
1099 series, and Form 5498 series; and
to allow only a single non-automatic 30day extension of time to file all of these
information returns. The proposed nonautomatic extension would have been
available on the same terms as the nonautomatic extension for the Form W–2
series in the temporary regulations. The
preamble to the proposed regulations
provided that removal of the automatic
extension would not apply to
information returns (other than the
Form W–2 series except Form W–2G)
due any earlier than January 1, 2018.
See 80 FR 48472.
III. Statutory Changes to Due Dates and
Penalties
Section 201 of the Protecting
Americans from Tax Hikes Act of 2015
(PATH Act), Public Law 114–113, Div.
Q (129 Stat. 3040, 3076), enacted on
December 18, 2015, amended section
6071 of the Code to change the due date
for filing Form W–2, ‘‘Wage and Tax
Statement,’’ and any returns or
statements required by the Secretary to
report nonemployee compensation.
Nonemployee compensation is currently
reportable in box 7 of Form 1099–MISC.
The amendments are effective for
information returns for calendar years
beginning after 2015.
Prior to enactment of the PATH Act,
the Form W–2 was required to be filed
by the last day of February (February 28
if amounts were not subject to the
Federal Insurance Contribution Act), or
March 31 if filed electronically. See
§ 1.6041–2(a)(3)(ii) and § 31.6071(a)1(a)(3)(i) (as in effect until July 20,
2017). Also prior to the enactment of the
PATH Act, the form reporting
nonemployee compensation, Form
1099–MISC, was required to be filed by
February 28, or March 31 if filed
electronically. See § 1.6041–6 (as in
effect until July 20, 2017).
As amended by the PATH Act, section
6071 provides that the due date for
filing the Form W–2 and any returns or
statements required by the Secretary to
report nonemployee compensation is
January 31 of the calendar year
following the calendar year for which
the information is being reported,
regardless of whether these information
returns are filed on paper or
electronically. Section 31.6071(a)1T(a)(3) provides this due date for the
entire Form W–2 series (except Form
W–2G). The due date for filing Form
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nonemployee compensation was
unchanged by the PATH Act
amendment to section 6071, and it
remains February 28, or March 31 if
filed electronically.
Section 201 of the PATH Act also
amended section 6402 to provide that
no credit or refund of an overpayment
may be made to a taxpayer before the
fifteenth day of the second month
following the close of the taxable year
(February 15 for calendar year
taxpayers) if the Additional Child Tax
Credit (ACTC) under section 24(d) or
the Earned Income Credit (EIC) under
section 32 is allowed for such taxable
year.
In addition, section 202 of the PATH
Act amended sections 6721 and 6722 of
the Code to generally provide a $100 de
minimis error threshold ($25 for
withholding) under which the penalties
for failure to file and failure to furnish
accurate information returns and payee
statements do not apply. Payees,
however, can still elect to receive
accurate payee statements, in which
case the de minimis threshold does not
apply to the penalties for failure to file
and furnish. See section 6722(c)(3)(B).
Summary of Comments
There were eleven written comments
submitted in response to the notice of
proposed rulemaking. They are
available at http://www.regulations.gov
or upon request.
I. Comments Recommending
Alternatives To Removing the
Automatic Extension of Time To File
Information Returns
Comments stated that the automatic
extension of time to file should not be
removed for any information returns
and instead alternative or
complementary steps to reduce fraud
should be taken. Those suggested steps
include: (1) Delay the start of the filing
season or issue refunds only after the
Social Security Administration (SSA)
has transferred all Form W–2
information to the IRS; (2) require
electronic filing of all information
returns at issue; (3) reduce the threshold
requirement for filing information
returns electronically from 250 returns
to five returns; and (4) issue an identity
protection personal identification
number (IP PIN) to each known
taxpayer.
Some of these steps have already been
taken. For instance, the PATH Act
amended section 6402 so that refunds
cannot be issued before February 15 if
the EIC or the ACTC is allowed for the
taxable year. This amendment has the
effect of allowing the IRS to receive
more Form W–2 information with

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38025

respect to these returns before issuing
refunds. Other steps, such as requiring
electronic filing of all information
returns or reducing the electronic filing
threshold, require legislation to
implement.
Comments suggesting that the IRS
delay the start of the filing season
(without regard to the February 15 date
if the EIC or the ACTC is allowed) or
issue refunds only after receiving Form
W–2 information from the SSA were not
adopted. Taxpayers who rely on their
tax refunds to pay bills for necessary
expenses might be unduly burdened by
such a delay. Additionally, when
Congress amended section 6402 to
prevent the IRS from issuing some
refunds before February 15, it did not
use a later date or delay refunds to all
taxpayers, thus indicating a sensitivity
to the negative effect that further
delaying taxpayer refunds could have
on certain taxpayers.
Regarding the comment that issuing
an IP PIN to each known taxpayer
would reduce fraud and identity theft
and eliminate the need to accelerate
receipt of certain information returns,
the Treasury Department and the IRS
disagree. While the IP PIN has been an
effective tool for protecting taxpayers
from subsequent refund fraud, it is not
a holistic or sustainable solution that
can be applied to the more than 150
million returns that are filed annually
each year. See TIGTA report 2017–40–
026, ‘‘Inconsistent Processes and
Procedures Result in Many Victims of
Identity Theft Not Receiving Identity
Protection Personal Identification
Numbers,’’ 20–22. Additionally, even if
the IRS implemented such a proposal,
the IRS’s efforts to reduce fraud and
identity theft would be further
enhanced by also accelerating receipt of
information returns, such as Form W–2
and forms reporting nonemployee
compensation. Accordingly, this
suggestion has not been adopted.
Comments also suggested that the IRS
extend the filing deadline for individual
income tax returns to May 15, rather
than limiting the availability of an
automatic extension of time to file
information returns. Taxpayers may
already request an automatic six-month
extension of time to file individual
income tax returns under § 1.6081–4,
effectively extending the filing deadline
(but not the deadline by which to pay)
as suggested by the comment. However,
even if the IRS extended the filing
deadline to May 15 for all individual
taxpayers, that would do little to
prevent fraud because fraudulent filers
typically file early in the filing season
so that their fraudulent returns are
processed before legitimate taxpayers

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file their tax returns and before the IRS
receives information returns.
II. Comments Recommending Retention
of the Automatic Extension of Time To
File Information Returns With Low
Risk of Fraud
Comments suggested that the
regulations retain the automatic
extension of time to file forms other
than Form W–2 and forms reporting
nonemployee compensation, because
the other forms, specifically Form 1099–
INT, Form 1099–DIV, Form 1042–S, and
the Form 1095 series, are not major
sources of withholding or backup
withholding information and are not
relevant to preventing fraud. The
comments cited GAO Report GAO–14–
633, ‘‘Identity Theft, Additional Actions
Could Help IRS Combat the Large,
Evolving Threat of Refund Fraud,’’ for
the assertion that information return
documents other than Form W–2 do not
have a nexus to fraud. The comments
also stated that Form 1042–S is not as
susceptible to fraud because Form
1040–NR, ‘‘U.S. Nonresident Alien
Income Tax Return,’’ and Form 1120–F,
‘‘U.S. Income Tax Return of a Foreign
Corporation,’’ are already subject to an
extensive review by the IRS.
In contrast, one comment stated that
the burden on filers of removing the
automatic extension of time to file was
a worthwhile tradeoff, given the
financial burdens on taxpayers whose
refunds are stolen. This comment
suggested that filers should be able to
verify many of their records prior to the
end of the tax year, and that it was their
responsibility to maintain accurate
records.
The Treasury Department and the IRS
agree that accelerating the filing date for
information returns reporting
compensation will contribute more to
the reduction of refund fraud than
accelerating the filing date of other
information returns would. This is
because refund fraud is most prevalent
on individual income tax returns
reporting wages or self-employment
income. Consistent with this, Congress
enacted section 201 of the PATH Act as
part of its program integrity measures
included in the Consolidated
Appropriations Act of 2016 to accelerate
the date by which Form W–2 and
statements reporting nonemployee
compensation, but not other information
returns, must be filed. In addition,
§ 31.6071(a)-1T(a)(3) provides that the
due date implemented by the PATH Act
for Form W–2 applies to the entire Form
W–2 series (except Form W–2G).
Therefore, the comment is adopted, and
the final regulations only remove the
automatic extension of time to file the

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Form W–2 series (except Form W–2G)
and forms reporting nonemployee
compensation (currently Form 1099–
MISC with information in box 7). The
IRS continues to study the
appropriateness of the automatic
extension for other information returns.
III. Comments Regarding Increased
Errors as a Result of Removal of the
Automatic Extension of Time To File
Comments stated that removing the
automatic extension of time to file
would compress the time between the
date the payee statements are sent and
the information returns are required to
be filed with the IRS. This is
particularly true in the case of Form
1099–B, ‘‘Proceeds from Broker and
Barter Exchange Transactions,’’ and
Form 1099–MISC with information in
boxes 8 or 14 only (relating to substitute
dividends and tax-exempt interest
payments reportable by brokers and
gross proceeds paid to attorneys),
because the due date to furnish
statements to payees for those forms is
February 15. Without the automatic
extension, there is less time before the
filing due date for recipients of the
payee statements to discover errors and
communicate them to the filer, resulting
in more errors on filed information
returns and the need to file more
corrected information returns.
Comments also stated that this
compression is made more acute
because the system for filing
information returns electronically
(FIRE) requires files be in a format
different from the format many filers use
to prepare the payee statements.
Without the automatic extension of time
to file there will be less time to
accommodate these differences, which
could lead to an increase in errors and
the need to file corrected information
returns.
The comments also stated that filers’
necessary year-end audit practices with
respect to information that is ultimately
reported on information returns are
time-consuming, and the automatic
extension of time to file increases the
accuracy of filed returns. Finally, the
comments stated that removing the
automatic extension further compresses
the filing season, burdening accounting
professionals who already work 60 to 80
hours per week in the months leading
up to the filing deadlines.
One comment supported the proposed
regulations generally, but opposed the
removal of the automatic extension of
time to file the Form 1099 series. The
comment stated that the pressure to
meet a rigid deadline would lead to
more errors for small businesses without
full-time bookkeepers and would have a

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financial impact on those businesses.
Small startups would be
disproportionately affected because they
are more likely to use independent
contractors, for which they have to file
information returns in the Form 1099
series. The comment requested that the
IRS conduct a regulatory flexibility
analysis and make it available for public
comment if these final regulations
remove the automatic extension of time
to file the Form 1099 series.
The comments supporting retention of
the automatic extension of time to file
most information returns are adopted in
the final regulations. However, as
discussed above in section II of this
Summary of Comments, acceleration of
the IRS’s receipt of information relating
to compensation is an important tool to
reduce fraud and noncompliance.
Further, the removal of the automatic
extension of time to file the Form
W–2 series (except Form W–2G) and
forms reporting nonemployee
compensation is consistent with section
201 of the PATH Act and its supporting
regulations under § 31.6071(a)–1T(a)(3),
which together accelerated the filing
deadline for both the Form W–2 series
(except Form W–2G) and forms
reporting nonemployee compensation.
Accordingly, the final regulations
remove the automatic extension of time
to file the Form W–2 series (except
Form W–2G) and forms reporting
nonemployee compensation.
With regard to the request for a
regulatory flexibility analysis in the case
of the removal of the automatic
extension of time to file the Form 1099
series, the only affected forms are forms
reporting nonemployee compensation.
As certified in the Special Analyses
section of this Treasury Decision, the
Treasury Department and the IRS have
concluded that these regulations will
not have a significant economic impact
on a substantial number of small
entities. As a result of this certification,
a regulatory flexibility analysis is not
required.
With regard to Form 1094–C and the
Form 1095 series, the comments stated
that preserving the automatic extension
of time to file would allow health
insurers to maintain their current
processes. The Treasury Department
and the IRS agree with these comments
and, therefore, the final regulations
retain the automatic extension of time to
file Form 1094–C, Form 1095–B, and
Form 1095–C.
IV. Comments About Forms W–2 and
Reliance on Information or Actions by
Third Parties
Comments stated various reasons why
the automatic 30-day extension of time

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to file Form W–2 should be retained.
Comments stated that to prepare Form
W–2, filers rely on third-party payment
information from states on sickness and
disability payments that is not due to
the filers until January 15, and filers
have no control over the timeliness and
accuracy of this third-party information.
The comments also stated that Form
W–2 filers rely on third-party
information that they receive after the
end of the tax year for nonqualified
moving expenses, prizes and awards,
the value of company housing and
travel, and non-cash fringe benefits.
As discussed under section II and
reiterated under section III of this
Summary of Comments, removal of the
automatic extension of time to file the
Form W–2 series (except Form W–2G)
will contribute to the reduction of
refund fraud and is consistent with
section 201 of the PATH Act and its
supporting regulations. The Treasury
Department and the IRS understand that
there may be some situations that will
necessitate filers to seek a nonautomatic extension of time to file; for
instance, when a filer does not timely
receive the statement of sick pay
required under § 31.6051–3(a)(1).
Removal of the automatic extension,
however, will increase the number of
Forms W–2 received by the IRS early
enough in the filing season for the IRS
to verify information and reduce
payment of fraudulent refunds.
V. Comments on Form 1042–S,
Reclassification of Distributions, and
Additional Burdens
Comments stated that corrections are
sometimes necessary after the statutory
deadlines to file certain returns, such as
Form 1042–S, because of
reclassifications of distributions.
Information regarding these
reclassifications is not available until
sometime between mid-January and the
end of February. If Forms 1042–S must
be filed without the benefit of an
automatic extension of time to file, then
it is more likely that they will have to
be amended later based on the
reclassification information. Comments
added that software vendors typically
release their software in late February
for Form 1042–S, and that there is not
enough time to format information and
test the software prior to the March 15
statutory due date. Comments also
mentioned that filers regularly seek
extensions of time to furnish recipient
statements for Form 1042–S in addition
to extensions of time to file, and the
comments advised that the IRS should
expect an increase in the filing of both
amended information returns and
amended income tax returns as a result

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of the unavailability of the automatic
extension, particularly for Form 1042–S.
Comments further added that updates to
the Form 1099 series resulting from the
Foreign Account Tax Compliance Act,
Public Law 111–147, Title V, Subtitle A
(124 Stat. 71, 97), and sections 6050W
and 6045B require year-end system
upgrades and testing, which must be
performed by the same people who
otherwise implement the year-end
compliance processes and therefore
increase, rather than decrease, the time
needed to file. Finally, the comments
mentioned that information that flows
from partnership returns or upstream
withholding agents is not available until
March 15.
As discussed previously under
section II of this Summary of
Comments, these final regulations do
not remove the automatic extension of
time to file information returns other
than the Form W–2 series (except Form
W–2G) and forms reporting
nonemployee compensation. Therefore,
the comment that Form 1042–S should
remain eligible for the automatic
extension of time to file has been
adopted. However, the IRS continues to
study the appropriateness of the
automatic extension of time to file Form
1042–S.
VI. Comments on Penalties
One comment suggested that, given
filers’ potential inability to comply with
the statutory filing dates, filers should
have reassurances that the IRS will grant
the non-automatic extension of time to
file so that they do not face penalties.
The comment therefore requested that
specific criteria for granting the nonautomatic extension should be
published in the final regulation. The
comment also stated that the proposed
requirement to show extraordinary
circumstances or catastrophe is too
strict a standard to impose on the
extension process. The comment further
stated that penalties would be
unreasonable where a request for an
extension of time to file was not
granted, and the process of seeking
relief if penalties were imposed in these
situations would be arduous. In
addition, the comment stated that
despite the new $100 de minimis error
threshold exception for penalties, there
would still be a substantial number of
errors that would exceed the de minimis
threshold and require correction. Also,
comments noted that the increase in
errors in information returns filed with
the IRS as a result of not obtaining an
extension of time to file might lead to
more penalty notices, which would
increase the burden on filers seeking
relief under reasonable cause. This

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38027

increase in penalty notices would also
increase the burden on the IRS, which
would have to handle many more
requests for abatements or waivers of
the penalty.
The Treasury Department and the IRS
considered these comments and agree
that it is appropriate to set forth the
specific criteria under which the IRS
will grant the non-automatic extension
of time to file. Since publication of the
temporary and proposed regulations in
2015, Form 8809 has been revised to
provide specificity around the criteria
for when a non-automatic extension will
be granted. When Form 8809 allowed
the filer or transmitter to provide a
narrative explanation of the need for an
extension, it was difficult to review the
explanations in a timely manner
because of the length of some of the
explanations and the various ways that
filers or transmitters would describe the
reason for the extension request. To
eliminate this issue, the form has been
revised to provide checkboxes for the
filer or transmitter to indicate the reason
for the extension request.
The IRS intends to update Form 8809
in time for the 2019 filing season to
provide that a non-automatic extension
of time to file will be granted if and only
if (1) the business suffered a
catastrophic event in a Federally
Declared Disaster Area that made the
business unable to resume operations or
made necessary records unavailable; (2)
fire, casualty or natural disaster affected
the operation of the business; (3) death,
serious illness, or unavoidable absence
of the individual responsible for filing
the information returns affected the
operation of the business; (4) the
information return is being filed for the
first year the business was established;
or (5) the filer did not receive timely
data on a third-party payee statement.
This third-party payee statement might
be a Schedule K–1, ‘‘Partner’s Share of
Current Year Income, Deductions,
Credits and Other Items,’’ Form 1042–S,
or the statement of sick pay required
under § 31.6051–3(a)(1). Additionally,
the extension will be granted even if the
filer receives the third-party payee
statement by the statutory furnishing
deadline, provided that the filer did not
receive the statement in time to prepare
an accurate information return.
These five criteria will all be set forth
in checkboxes on Form 8809. The first
four of these criteria are already present
on the form, with non-substantive
differences in phrasing, and were
derived from the reasons for which the
IRS would grant a non-automatic
extension of time to file during recent
years when a narrative explanation was
permitted. The fifth criteria will be

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Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations

added to Form 8809 in response to
comments about reliance on third-party
information. The Treasury Department
and the IRS request comments on these
criteria and welcome comments
suggesting additional criteria that
should be added to Form 8809 as
reasons to grant the non-automatic
extension. Interested parties can address
the existing criteria and suggest new
criteria by submitting comments on
Form 8809 at http://www.irs.gov/
FormsComments.
Also, with regard to the comments
about the potential increase in errors
and penalty notices, penalty abatement
may be available for filers who fail to
file timely but do not receive an
extension of time to file. Although
requests for abatement may increase
under the new rules, the IRS is prepared
to consider those additional requests.
The Treasury Department and the IRS
request comments regarding how the
IRS may reduce the burden on filers
who request abatement.
Special Analyses
These regulations are not subject to
review under section 6(b) of Executive
Order 12866 pursuant to the
Memorandum of Agreement (April 11,
2018) between the Treasury Department
and the Office of Management and
Budget regarding review of tax
regulations.
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby
certified that these regulations will not
have a significant economic impact on
a substantial number of small entities.
Although the regulations may
potentially affect a substantial number
of small entities, the economic impact
on these entities is not expected to be
significant. If at least one of the criteria
for granting an extension applies, a
business may obtain a 30-day extension
of time to file by properly completing
Form 8809, so many businesses will still
obtain an extension of time to file. Prior
versions of § 1.6081–8 also required
businesses to file Form 8809 to obtain

an extension, so no additional economic
impact is associated with the
requirement to file this form. For
businesses that do not qualify for the
extension, the regulations do not impose
new information reporting
requirements, but they do affect whether
the filing due date may be extended.
Although there may be some additional
costs associated with ensuring that
information returns filed by their
statutory due date, as opposed to the
extended due date, are accurate, those
costs will not impose a significant
economic impact on a substantial
number of small entities.
In addition, statutory changes have
minimized the benefit of the automatic
extension of time to file. Prior to these
changes, most filers had a due date
(without regard to extensions) of March
31 for the information returns currently
subject to the rule eliminating the
automatic extension of time to file—the
Form W–2 series (except Form W–2G)
and Form 1099–MISC reporting
nonemployee compensation. With the
automatic extension, these filers
generally had until April 30 to file these
information returns. The PATH Act and
the accompanying regulations
accelerated the due date for the Form
W–2 series (except Form W–2G) and
Form 1099–MISC reporting
nonemployee compensation from March
31 to January 31. Therefore, even if the
automatic extension was still available,
the Form W–2 series (except Form W–
2G) and Form 1099–MISC reporting
nonemployee compensation would be
due much earlier than under prior law,
so the statutory change under the PATH
Act is the primary cause of any
additional cost associated with having
to file these forms earlier in the filing
season. Pursuant to section 7805(f) of
the Code, the notice of proposed
rulemaking preceding these regulations
was submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on its
impact on small business. No comments

were received from the Small Business
Administration.
Drafting Information
The principal author of these
regulations is Jonathan R. Black of the
Office of the Associate Chief Counsel
(Procedure and Administration).
Statement of Availability of IRS
Documents
The IRS Revenue Procedure cited in
this document is published in the
Internal Revenue Bulletin (or
Cumulative Bulletin) and is available
from the Superintendent of Documents,
U.S. Government Publishing Office,
Washington, DC 20402, or by visiting
the IRS website at http://www.irs.gov.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:

■

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.6081–8 is revised to
read as follows:

■

§ 1.6081–8 Extension of time to file certain
information returns.

(a) Certain information returns
eligible for an automatic extension of
time to file—(1) Automatic extension of
time to file. A person required to file an
information return (the filer) on the
forms or form series listed in Table 1
will be allowed one automatic 30-day
extension of time to file the information
return beyond the due date for filing, if
the filer or the person transmitting the
information return for the filer (the
transmitter) files an application in
accordance with paragraph (c)(1) of this
section.

amozie on DSK3GDR082PROD with RULES

TABLE 1 TO PARAGRAPH (a)(1)
Form or form series

Name of form

Form W–2G ........................................................................
Form 1042–S .....................................................................
Form 1094-C ......................................................................

‘‘Certain Gambling Winnings’’.
‘‘Foreign Person’s U.S. Source Income Subject to Withholding’’.
‘‘Transmittal of Employer-Provided Health Insurance Offer and Coverage Information
Returns’’.
‘‘Health Coverage’’.
‘‘Employer-Provided Health Insurance Offer and Coverage’’.
‘‘Exercise of an Incentive Stock Option Under Section 422(b)’’.
‘‘Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)’’.
‘‘Employer’s Annual Information Return of Tip Income and Allocated Tips’’.

Form
Form
Form
Form

1095–B .....................................................................
1095–C .....................................................................
3921 ..........................................................................
3922 ..........................................................................

Form 8027 ..........................................................................
Form 1097 series.
Form 1098 series.

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38029

TABLE 1 TO PARAGRAPH (a)(1)—Continued
Form or form series

Name of form

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Form 1099 series (except forms reporting nonemployee
compensation).
Form 5498 series.

(2) Non-automatic extension of time
to file. One additional 30-day extension
of time to file an information return on
a form listed in paragraph (a)(1) of this
section may be allowed if the filer or
transmitter submits a request for the
additional extension of time to file
before the expiration of the automatic
30-day extension of time to file. No
extension of time to file will be granted
under this paragraph (a)(2) unless the
filer or transmitter has first obtained an
automatic extension of time to file
under paragraph (a)(1) of this section.
To request the additional 30-day
extension of time to file, the filer or
transmitter must satisfy the
requirements of paragraph (c)(2) of this
section. No additional extension of time
to file will be allowed for an
information return on a form listed in
paragraph (a)(1) of this section under
§ 1.6081–1 beyond the extensions of
time to file provided by paragraph (a)(1)
of this section and this paragraph (a)(2).
(b) The Form W–2 series (except Form
W–2G) or forms reporting nonemployee
compensation. Except as provided in
paragraph (f) of this section, the filer or
transmitter of an information return on
the Form W–2 series (except Form W–
2G) or a form reporting nonemployee
compensation may only request one
non-automatic 30-day extension of time
to file the information return beyond the
due date for filing it. To make such a
request, the filer or transmitter must
submit an application for an extension
of time to file in accordance with
paragraph (c)(2) of this section. No
additional extension of time to file will
be allowed for an information return on
a form listed in this paragraph (b) under
§ 1.6081–1 beyond the 30-day extension
of time to file provided by this
paragraph (b).
(c) Requirements—(1) Automatic
extension of time to file. To satisfy this
paragraph (c)(1), an application must—
(i) Be submitted on Form 8809,
‘‘Request for Extension of Time to File
Information Returns,’’ or in any other
manner as may be prescribed by the
Commissioner; and
(ii) Be filed with the Internal Revenue
Service office designated in the
application’s instructions on or before
the due date for filing the information
return.

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(2) Non-automatic extension of time
to file. To satisfy this paragraph (c)(2),
a filer or transmitter must—
(i) Submit a complete application on
Form 8809, or in any other manner
prescribed by the Commissioner,
indicating that at least one of the criteria
set forth in the forms, instructions, or
other guidance for granting an extension
applies;
(ii) File the application with the
Internal Revenue Service in accordance
with forms, instructions, or other
appropriate guidance on or before the
due date for filing the information
return (for purposes of paragraph (a)(2)
of this section, determined with regard
to the extension of time to file under
paragraph (a)(1) of this section); and
(iii) Sign the application under
penalties of perjury.
(d) Penalties. See sections 6652, 6693,
and 6721 through 6724 of the Code for
failure to comply with information
reporting requirements on information
returns described in this section.
(e) No effect on time to furnish
statements. An extension of time to file
an information return under this section
does not extend the time for furnishing
a statement to the person with respect
to whom the information is required to
be reported.
(f) Form W–2 filed on expedited basis.
This section does not apply to an
information return on a form in the W–
2 series if the procedures authorized in
Rev. Proc. 96–57 (1996–2 CB 389) (or a
successor revenue procedure) allow an
automatic extension of time to file the
information return. See
§ 601.601(d)(2)(ii)(b) of this chapter.
(g) Applicability date. This section
applies to requests for extensions of
time to file information returns required
to be filed after December 31, 2018.
Section 1.6081–8T (as contained in 26
CFR part 1, revised April 1, 2018)
applies to extensions of time to file
information returns required to be filed
before January 1, 2019.

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§ 1.6081–8T
■

[Removed]

Par. 3. Section 1.6081–8T is removed.

Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.
Approved: July 13, 2018.
David J. Kautter,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2018–16717 Filed 8–1–18; 4:15 pm]
BILLING CODE 4830–01–P

DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket Number USCG–2018–0027]
RIN 1625–AA11

Regulated Navigation Area; Lake
Washington, Seattle, WA
Coast Guard, DHS.
Temporary final rule.

AGENCY:
ACTION:

The Coast Guard is
establishing a temporary regulated
navigation area for certain navigable
waters of Lake Washington. The
regulated navigation area is intended to
protect personnel and vessels moored in
the vicinity and other vessel traffic from
potential hazards created by vessel
wake. Vessels transiting this area will be
restricted to speeds that create a
minimum wake.
DATES: This rule is effective from 8 p.m.
on August 3, 2018, through 11:59 p.m.
on August 5, 2018. This rule will be
enforced from 8 p.m. to 8 a.m. daily
from August 3, 2018, through August 4,
2018 and from 8 p.m. to 11:59 p.m. on
August 5, 2018.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to http://
www.regulations.gov, type USCG–2018–
0027 in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, call or
email Petty Officer Zachary Spence,
SUMMARY:

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