[Federal Register Volume 69, Number 234 (Tuesday, December 7, 2004)]
[Rules and Regulations]
[Pages 70547-70550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26837]



[[Page 70547]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 25, 31, 53, 55, 156, 301, and 602

[TD 9163]
RIN 1545-BB29


Automatic Extension of Time To File Certain Information Returns 
and Exempt Organization Returns

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

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SUMMARY: This document contains final regulations relating to the 
automatic extension of time to file certain information returns and 
exempt organization returns. The final regulations adopt temporary 
rules that removed the requirement for a signature and an explanation 
to obtain an automatic extension of time to file these returns. The 
final regulations also remove the requirement for a signature to obtain 
an automatic extension of time to file corporation income tax returns. 
The final regulations affect taxpayers who need an extension of time to 
file certain information returns, exempt organization returns, and/or 
corporation income tax returns.

DATES: Effective Date: These regulations are effective on December 7, 
2004.
    Applicability Date: For dates of applicability, see Sec. Sec.  
1.6081-3(e), 1.6081-8(g), 1.6081-9(f), and 31.6081(a)-1(d).

FOR FURTHER INFORMATION CONTACT: Charles A. Hall, (202) 622-4940 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    This document contains amendments to 26 CFR parts 1, 25, 31, 53, 
55, 156, 301, and 602 under section 6081 of the Internal Revenue Code, 
relating to extensions of time to file Federal tax returns.
    On June 11, 2003, the IRS published final and temporary regulations 
(TD 9061) in the Federal Register (68 FR 34797). A cross-reference 
notice of proposed rulemaking (REG-107618-02) was published in the 
Federal Register (68 FR 34875) on the same day. Subsequently, the IRS 
published a correction to the final and temporary regulations dated 
September 18, 2003 (68 FR 54660).
    The temporary regulations provide an automatic extension of time to 
file certain information returns and exempt organization returns. The 
temporary regulations also removed the previously applicable rules 
requiring a signature and an explanation to obtain an automatic 
extension of time to file these returns. In addition, the temporary 
regulations made other minor changes to conform the regulations under 
section 6081 to current law and practice.
    No comments were received from the public in response to the notice 
of proposed rulemaking and no public hearing was requested or held.

Explanation of Provisions

    This Treasury decision removes the temporary regulations and adopts 
the proposed regulations as final regulations with the changes 
explained below.
    The first change relates to the automatic extension of time to file 
exempt organization returns. Section 1.6081-9(a) of the proposed 
regulations provides that exempt organizations may automatically extend 
the time for filing Form 990 (series) returns for three months. This 
language inadvertently included exempt organizations organized in 
corporate form (corporate filers) that file Forms 990-T, ``Exempt 
Organization Business Income Tax Return'' (and proxy tax under section 
6033(e)), who previously could obtain a six-month extension of time to 
file each year. The IRS and the Treasury Department did not intend to 
make any changes regarding the extension period for corporate filers of 
the Form 990-T. Therefore, these final regulations clarify that 
corporate filers of the Form 990-T may obtain a six-month automatic 
extension of time to file by properly filing Form 8868.
    Furthermore, in reviewing the regulations under section 6081, the 
IRS and the Treasury Department determined that it was appropriate to 
amend Sec.  1.6081-3 to eliminate the requirement for corporations to 
provide a signature on Form 7004, ``Application for Automatic Extension 
of Time To File Corporation Income Tax Return,'' to obtain a six-month 
automatic extension of time to file a corporation income tax return. 
Section 1.6081-3, like all other regulations providing for automatic 
extensions of time to file, does not require the taxpayer to explain 
why the extension is needed. Section 1.6081-3, however, unlike the 
other automatic extensions of time to file, does require a signature on 
the Form 7004. This signature requirement is an impediment to filing 
the Form 7004 electronically. The IRS and the Treasury Department have 
determined that there is no need for a signature requirement for the 
automatic corporation income tax return extension. Thus, to promote 
consistency and to remove barriers to electronic filing, this Treasury 
decision removes the signature requirement from Sec.  1.6081-3.
    In addition to removing the signature requirement, this Treasury 
decision revises Sec.  1.6081-3 to reflect the repeal of section 6152, 
which allowed corporations to pay tax in installments. A similar 
revision is made to Sec.  301.6651-1, relating to the addition to tax 
for failure to file return or pay tax. For a corporation that obtains 
an automatic extension of time to file under Sec.  1.6081-3, the 
existing rules in Sec.  301.6651-1(c)(4) provide that there is 
reasonable cause (and therefore no addition to tax) for failure to pay 
tax for the period of the extension if the corporation made payments on 
a schedule consistent with the installment payment schedule in section 
6152, paid at least 90% of its tax due on or before the due date for 
the return, and paid any balance due on or before the extended due 
date. This Treasury decision removes the requirement that the 
corporation make payments on a schedule consistent with section 6152.
    Section 1.6081-8 allows filers and transmitters of information 
returns on Form 1099 (series), 1098 (series), 5498 (series), W-2 
(series), W-2G, 1042-S, and 8027 to request an automatic 30-day 
extension of time to file without having to sign Form 8809 and provide 
an explanation. An explanation and a signature are required if filers 
and transmitters need additional time to file after receiving the 
automatic 30-day extension. These regulations also permit employers to 
obtain an extension of time to file the Social Security Administration 
copy of Forms W-2 and W-3 without providing a statement of the reasons 
for requesting the extension.
    The final regulations clarify that filers and transmitters are 
eligible for only one automatic extension of time to file. Filers and 
transmitters filing Forms W-2 on an expedited basis under Sec.  
31.6071(a)-1(a)(3)(ii) may receive an automatic extension of time to 
file Forms W-2 under Rev. Proc. 96-57, 1996-2 C.B. 389. These filers 
and transmitters are not eligible to obtain the 30-day automatic 
extension under Sec.  1.6081-8(b). If these filers and transmitters 
need additional time, they may request an extension under the generally 
applicable procedures for obtaining additional extensions of time to 
file Form W-2.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a

[[Page 70548]]

regulatory assessment is not required. It also has been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
does not apply to these regulations and, therefore, notice of the 
amendments to Sec. Sec.  1.6081-3 and 301.6651-1 and public procedure 
thereon is not required. Because these amendments merely remove a 
restriction (signature requirement) and otherwise make only 
nonsubstantive changes to remove references to prior law, a delayed 
effective date pursuant to 5 U.S.C. 553(d) is also not required.
    In addition, because the regulation does not impose a collection of 
information on small entities, the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) does not apply. Pursuant to section 7805(f) of the Internal 
Revenue Code, the notice of proposed rulemaking preceding this 
regulation and the amendments to Sec. Sec.  1.6081-3 and 301.6651-1 
have been submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on their impact on small business.

Drafting Information

    The principal author of these regulations is Charles A. Hall of the 
Office of Associate Chief Counsel, Procedure and Administration 
(Administrative Provisions and Judicial Practice Division). However, 
other personnel from the IRS and Treasury Department participated in 
their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 25

    Gift taxes, Reporting and recordkeeping requirements.

26 CFR Part 31

    Employment taxes, Income taxes, Penalties, Pensions, Railroad 
retirement, Reporting and recordkeeping requirements, Social security, 
Unemployment compensation.

26 CFR Part 53

    Excise taxes, Foundations, Investments, Lobbying, Reporting and 
recordkeeping requirements.

26 CFR Part 55

    Excise taxes, Investments, Reporting and recordkeeping 
requirements.

26 CFR Part 156

    Excise taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

26 CFR Part 602

    Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR parts 1, 25, 31, 53, 55, 156, 301, and 602 are 
amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by removing 
the entries for Sec.  1.6081-8T and Sec.  1.6081-9T and adding entries 
in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.6081-8 also issued under 26 U.S.C. 6081(a).
    Section 1.6081-9 also issued under 26 U.S.C. 6081(a). * * *


0
Par. 2. Section 1.6081-1 is amended by revising paragraph (a) to read 
as follows:


Sec.  1.6081-1  Extension of time for filing returns.

    (a) In general. The Commissioner is authorized to grant a 
reasonable extension of time for filing any return, declaration, 
statement, or other document which relates to any tax imposed by 
subtitle A of the Code and which is required under the provisions of 
subtitle A or F of the Code or the regulations thereunder. However, 
other than in the case of taxpayers who are abroad, such extensions of 
time shall not be granted for more than 6 months, and the extension of 
time for filing the return of a DISC (as defined in section 992(a)), as 
specified in section 6072(b), shall not be granted. Except in the case 
of an extension of time pursuant to Sec.  1.6081-5, an extension of 
time for filing an income tax return shall not operate to extend the 
time for the payment of the tax unless specified to the contrary in the 
extension. For rules relating to extensions of time for paying tax, see 
Sec.  1.6161-1.
* * * * *

0
Par. 3. Section 1.6081-3 is revised to read as follows:


Sec.  1.6081-3  Automatic extension of time for filing corporation 
income tax returns.

    (a) In general. A corporation or an affiliated group of 
corporations filing a consolidated return will be allowed an automatic 
6-month extension of time to file its income tax return after the date 
prescribed for filing the return if the following requirements are met:
    (1) An application must be submitted on Form 7004, ``Application 
for Automatic Extension of Time To File Corporation Income Tax 
Return,'' or in any other manner as may be prescribed by the 
Commissioner.
    (2) The application must be filed on or before the date prescribed 
for the filing of the return of the corporation (or the consolidated 
return of the affiliated group of corporations) with the Internal 
Revenue Service office designated in the application's instructions.
    (3) The corporation (or affiliated group of corporations filing a 
consolidated return) must remit the amount of the properly estimated 
unpaid tax liability on or before the date prescribed for payment.
    (4) The application must include a statement listing the name and 
address of each member of the affiliated group if the affiliated group 
will file a consolidated return.
    (b) No extension of time for the payment of tax. Any automatic 
extension of time for filing a corporation income tax return granted 
under paragraph (a) of this section shall not operate to extend the 
time for payment of any tax due on such return.
    (c) Termination of automatic extension. The Commissioner may 
terminate an automatic extension at any time by mailing a notice of 
termination to the corporation (parent corporation in the case of an 
affiliated group of corporations filing a consolidated return). The 
notice shall be mailed at least 10 days prior to the termination date 
designated in such notice. The notice of termination shall be 
sufficient for all purposes when mailed to the corporation at the 
address shown on Form 7004 or to the corporation's last known address. 
For further guidance regarding the definition of last known address, 
see Sec.  301.6212-2 of this chapter.
    (d) No extension for DISCs. Paragraphs (a) through (c) of this 
section shall not apply to returns filed by a DISC pursuant to section 
6011(c)(2).
    (e) Effective date. This section applies to requests for extension 
of time to file corporation income tax returns due after December 7, 
2004.

0
Par. 4. Section 1.6081-8 is added to read as follows:


Sec.  1.6081-8  Automatic extension of time to file certain information 
returns.

    (a) In general. Except as provided in paragraph (f) of this 
section, a person required to file an information return (the filer) on 
Form W-2 series, W-2G, 1042-S, 1098 series, 1099 series, 5498

[[Page 70549]]

series, or 8027 will be allowed one automatic 30-day extension of time 
to file the return after the date prescribed for filing the return if 
the filer or the person transmitting the return for the filer (the 
transmitter) files an application in accordance with paragraph (b) of 
this section.
    (b) Requirements. To satisfy this paragraph (b), an application 
must--
    (1) 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
    (2) Be filed with the Internal Revenue Service office designated in 
the application's instructions on or before the date prescribed for 
filing the information return.
    (c) Penalties. See sections 6652, 6693, 6721, 6722, and 6723 for 
failure to file an information return.
    (d) Additional 30-day extension of time to file--(1) In general. 
This paragraph (d) provides procedures for obtaining an additional 
extension of time for filing an information return on a form listed in 
paragraph (a) of this section. No extension of time will be granted 
under this paragraph (d) unless the filer or transmitter has first 
obtained an automatic extension under this section.
    (2) Procedures. In the case of an information return on a form 
listed in paragraph (a) of this section, one additional 30-day 
extension of time to file the return may be allowed if the filer or 
transmitter submits a request for the additional extension before the 
expiration of the automatic 30-day extension. The request must--
    (i) Be submitted on Form 8809 or in any other manner as may be 
prescribed by the Commissioner;
    (ii) Explain in detail why the additional time is needed;
    (iii) Be signed by the filer or transmitter; and
    (iv) Otherwise satisfy the requirements of Sec.  1.6081-1.
    (e) No effect on time to provide statement to recipients. An 
extension under this section of time to file an information return does 
not extend the due date for providing 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 a return on Form W-2 (series) if the procedures authorized in Sec.  
31.6081(a)-1(a)(2)(ii) of this chapter allow an automatic extension of 
time to file the return.
    (g) Effective date. This section applies to requests for extension 
of time to file information returns due after December 7, 2004.


Sec.  1.6081-8T  [Removed]

0
Par. 5. Section 1.6081-8T is removed.
0
Par. 6. Section 1.6081-9 is added to read as follows:


Sec.  1.6081-9  Automatic extension of time to file exempt organization 
returns.

    (a) In general. A corporation required to file a return on Form 
990-T will be allowed an automatic six-month extension of time to file 
the return after the date prescribed for filing if the corporation 
files an application in accordance with paragraph (b) of this section. 
In any other case, an exempt organization required to file a return on 
Form 990 (series, except for Form 990-C), 1041-A, 4720, 5227, 6069, or 
8870 will be allowed an automatic three-month extension of time to file 
the return after the date prescribed for filing if the exempt 
organization files an application in accordance with paragraph (b) of 
this section. For guidance on extensions of time for an exempt 
organization to file Form 990-C, ``Farmer's Cooperative Association 
Income Tax Return,'' or Form 1120-POL, ``U.S. Income Tax Return for 
Certain Political Organizations,'' see Sec.  1.6081-3.
    (b) Requirements. To satisfy this paragraph (b), an application for 
an automatic extension under this section must--
    (1) Be submitted on Form 8868, ``Application for Extension of Time 
To File an Exempt Organization Return,'' or in any other manner as may 
be prescribed by the Commissioner;
    (2) Be filed with the Internal Revenue Service office designated in 
the application's instructions on or before the date prescribed for 
filing the return;
    (3) Show the full amount properly estimated as tentative tax for 
the exempt organization for the taxable year; and
    (4) Be accompanied by the full remittance of the amount properly 
estimated as tentative tax which is unpaid as of the date prescribed 
for the filing of the return.
    (c) Termination of automatic extension. The Commissioner may 
terminate an automatic extension at any time by mailing to the exempt 
organization a notice of termination. The notice must be mailed at 
least 10 days prior to the termination date designated in such notice. 
The notice of termination must be mailed to the address shown on the 
application for extension or to the exempt organization's last known 
address. For further guidance regarding the definition of last known 
address, see Sec.  301.6212-2 of this chapter.
    (d) Penalties. See sections 6651 and 6652(c) for failure to file an 
exempt organization return or failure to pay the amount shown as tax on 
the return.
    (e) Coordination with Sec.  1.6081-1. No extension of time will be 
granted under Sec.  1.6081-1 for filing an exempt organization return 
listed in paragraph (a) of this section until an automatic extension 
has been allowed pursuant to this section.
    (f) Effective date. This section applies to requests for extensions 
of time to file an exempt organization return due after December 7, 
2004.


Sec.  1.6081-9T  [Removed]

0
Par. 7. Section 1.6081-9T is removed.

PART 25--GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954

0
Par. 8. The authority citation for part 25 continues to read in part as 
follows:

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

PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE

0
Par. 9. The authority citation for part 31 is amended by removing the 
entry for Sec.  31.6081(a)-1T to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 31.6081(a)-1 also issued under 26 U.S.C. 6081.* * *


0
Par. 10. Section 31.6081(a)-1 is amended by:
    1. Revising paragraph (a)(2)(i).
    2. Adding paragraph (d).
    The revision and addition reads as follows:


Sec.  31.6081(a)-1  Extensions of time for filing returns and other 
documents.

    (a) * * *
    (2) Information returns of employers on Forms W-2 and W-3--(i) In 
general. The Commissioner may grant an extension of time in which to 
file the Social Security Administration copy of Forms W-2 and the 
accompanying transmittal form which constitutes an information return 
under Sec.  31.6051-2(a). For further guidance regarding extensions of 
time to file the Social Security Administration copy of Forms W-2 and 
W-3, see Sec.  1.6081-8 of this chapter.
* * * * *
    (d) Effective date. Paragraph (a)(2)(i) of this section applies to 
requests for extensions of time to file the Social Security 
Administration copy of Forms W-2 and W-3 due after December 7, 2004.


Sec.  31.6081(a)-1T  [Removed]

0
Par. 11. Section 31.6081(a)-1T is removed.

[[Page 70550]]

PART 53--FOUNDATION AND SIMILAR EXCISE TAXES

0
Par. 12. The authority citation for part 53 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.

PART 55--EXCISE TAX ON REAL ESTATE INVESTMENT TRUSTS AND REGULATED 
INVESTMENT COMPANIES

0
Par. 13. The first sentence of the authority citation for part 55 is 
revised to read as follows:

    Authority: 26 U.S.C. 6001, 6011, 6071, 6091, and 7805. * * *

PART 156--EXCISE TAX ON GREENMAIL

0
Par. 14. The authority citation for part 156 is revised to read as 
follows:

    Authority: 26 U.S.C. 6001, 6011, 6061, 6071, 6091, 6161, and 
7805.


0
Par. 15. In the list below, for each section indicated in the left 
column, remove the language in the middle column and add the language 
in the right column in its place:

------------------------------------------------------------------------
           Section                   Remove                  Add
------------------------------------------------------------------------
1.6081-2(f), first sentence   district director,    Commissioner.
                               including the
                               Assistant
                               Commissioner
                               (International), or
                               the director of a
                               service center.
1.6081-4(c), first sentence   district director,    Commissioner.
                               including the
                               Assistant
                               Commissioner
                               (International), or
                               the director of a
                               service center.
1.6081-5(a)(1)                1.6031-1(e)(2)......  1.6031(a)-1(e)(2)
1.6081-6(d), first sentence   district director,    Commissioner.
                               including the
                               Assistant
                               Commissioner
                               (International), or
                               the director of a
                               service center.
1.6081-7(d), first sentence   district director,    Commissioner.
                               including the
                               Assistant
                               Commissioner
                               (International), or
                               the director of a
                               service center.
25.6081-1, second sentence    district director or  Commissioner.
                               director of the
                               service center.
31.6081(a)-1(b), first        district director or  Commissioner.
 sentence                      director of a
                               service center.
53.6081-1(a), first sentence  District directors    The Commissioner is
                               and directors of
                               service centers are.
53.6081-1(b), first sentence  to the district       in accordance with
                               director or           the instructions to
                               director of the       the extension
                               service center with   request form
                               whom the return is
                               to be filed.
55.6081-1, first sentence     District directors    The Commissioner is
                               and directors of
                               service centers are.
156.6081-1(a), first          District directors    The Commissioner is
 sentence                      and directors of
                               service centers are.
156.6081-1(b), first          to the district       in accordance with
 sentence                      director or           the instructions to
                               director of the       the extension form.
                               service center with
                               whom the return is
                               to be filed.
------------------------------------------------------------------------

PART 301--PROCEDURE AND ADMINISTRATION

0
Par. 16. The authority citation for part 301 continues to read as 
follows:

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


Sec.  301.6651-1  [Amended]

0
Par. 17. Section 301.6651-1(c)(4) introductory text is amended by 
removing the language ``or (b)'', removing paragraph (c)(4)(i), and 
redesignating paragraphs (c)(4)(ii) and (c)(4)(iii) as paragraphs 
(c)(4)(i) and (c)(4)(ii), respectively.

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

0
Par. 18. The authority citation for part 602 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.

0
Par. 19. In Sec.  602.101, paragraph (b) is amended by removing the 
entries for Sec. Sec.  1.6081-8T and 1.6081-9T from the table.

    Approved: November 23, 2004.
Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.

Gregory Jenner,
Acting Assistant Secretary of the Treasury.
[FR Doc. 04-26837 Filed 12-6-04; 8:45 am]
BILLING CODE 4830-01-P