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Automatic Extensions for W-2s Set to End by 2017

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Aug 13th 2015
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The IRS issued final and temporary regulations on Aug. 12 that eliminate the automatic 30-day extension of time to file information returns on forms in the W-2 series, except Form W-2G, Certain Gambling Winnings, beginning with the 2017 filing season.

The new rules are being implemented to accelerate the filing of these forms so they are available earlier in the filing season for use in the IRS's identity theft and refund fraud detection processes.

“This change is an effort to combat a common scheme used by criminals where fraudulent tax returns are filed early in the filing season using false W-2 wage amounts and stolen Social Security numbers,” Nick Passini, manager of McGladrey Washington National Tax, wrote in a Tax Alert. “The current extension regime increases the probability that refunds will be paid to the criminals before the IRS has received – or been provided sufficient time to verify – Forms W-2 filed by employers.”

The current due dates to submit W-2 forms are on or before Feb. 28 if filing on paper, and March 31 if filing electronically. Under current rules, a taxpayer can obtain an automatic 30-day extension by submitting Form 8809, Application for Extension of Time to File Information Returns, to the IRS on or before the return's due date. In addition, taxpayers may request an additional 30-day nonautomatic extension, which can push the due date for electronically filed W-2 forms into the end of May.

But beginning on July 1, 2016, automatic extensions will no longer be available for the filing of W-2 forms, except Form W-2G. The new regulations now allow only a single, 30-day nonautomatic extension of time to file these information returns.

The IRS anticipates that it will grant the nonautomatic extension of time to file only in limited cases where the taxpayer's explanation demonstrates that an extension is needed as a result of “extraordinary circumstances or catastrophe,” such as a natural disaster or fire destroying the books and records the taxpayer needs for filing the information returns.

If the IRS does not grant the extension of time to file, information returns filed after their due dates are considered “not timely filed,” regardless of whether the application for extension of time to file was filed timely.

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By SimonP
Aug 17th 2015 14:00 EDT

Even better, why not do away with needing to get refunds in the first place by collecting the correct (or as near correct) amount of tax during the year. There are obviously types of taxpayer where that wouldn't work (e.g. self-employed) but it would be a start.

I have never understood why taxpayers are happy to lend money to the government (interest free) for up to a year and then get excited about getting it back so they can spend it. Daft! Absolutely daft!

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