[Federal Register Volume 83, Number 150 (Friday, August 3, 2018)]
[Rules and Regulations]
[Pages 38023-38029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16717]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9838]
RIN 1545-BM49


Extension of Time To File Certain Information 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 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

[[Page 38024]]

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 Sec.  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 Sec.  1.6081-8T removing the automatic 30-day 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)) 
cross-referencing 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 Sec.  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 
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 
Sec.  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, Sec.  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 30-day extension 
of time to file. Under Sec.  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 of time to file were permitted under Sec.  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 Sec.  1.6081-8T, 
which replaced the regulation under Sec.  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 Sec.  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 non-automatic 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 non-automatic 
extensions of time to file by adding Form 1094-C, Form 3921, and Form 
3922 to the list in Sec.  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

[[Page 38025]]

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 30-day extension of time to file all of these 
information returns. The proposed non-automatic extension would have 
been available on the same terms as the non-automatic 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 Sec.  1.6041-2(a)(3)(ii) and Sec.  
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 Sec.  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 1099-MISC that does not report 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 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 Sec.  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

[[Page 38026]]

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, Sec.  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 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 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 Sec.  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

[[Page 38027]]

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 non-automatic extension of time to file; 
for instance, when a filer does not timely receive the statement of 
sick pay required under Sec.  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 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 non-automatic 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 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 Sec.  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

[[Page 38028]]

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 Sec.  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

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

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


0
Par. 2. Section 1.6081-8 is revised to read as follows:


Sec.  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.

                       Table 1 to Paragraph (a)(1)
------------------------------------------------------------------------
        Form or form series                     Name of form
------------------------------------------------------------------------
Form W-2G.........................  ``Certain Gambling Winnings''.
Form 1042-S.......................  ``Foreign Person's U.S. Source
                                     Income Subject to Withholding''.
Form 1094[dash]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)''.
Form 8027.........................  ``Employer's Annual Information
                                     Return of Tip Income and Allocated
                                     Tips''.
Form 1097 series..................
Form 1098 series..................

[[Page 38029]]

 
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 Sec.  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 Sec.  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.
    (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 Sec.  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.


Sec.  1.6081-8T   [Removed]

0
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