Monthly Update:

September 2008 News Update

IRS Alters Extension Period for Some Classes of Returns

The IRS recently changed the extended due date for certain types of business and fiduciary tax returns. The purpose of the change is to help individual taxpayers better meet their filing obligations. The change reduces the extension period from six to five months and applies to the following types of returns:

• Form 1065, U.S. Return of Partnership Income
• Form 1041, U.S. Income Tax Return for Estates & Trusts
• Form 8804, Annual Return for Partnership Withholding Tax

Items of income, deductions and credits from partnerships, S corporations, and estates and trusts are reported to partners, investors and beneficiaries on Schedules K-1 and other similar statements. The recipients then use that information to complete their own tax returns.

Currently, the extended due dates for these returns (assuming a calendar year-end) and individual taxpayers fall on the same date -- October 15. The IRS believes this creates a burden for individual taxpayers who rely on the information from the Schedule K-1 and similar documents to prepare and file their personal tax returns in a timely manner. Requiring these statements to be issued one month earlier, generally by September 15, will provide recipients time to prepare and file their tax returns within the extended time frames.

This change will be effective for extension requests with respect to tax returns due on or after Jan. 1, 2009, and applies to business entities that file the affected returns and forms that have a tax year ending on or after September 30, 2008.