⚠️? IRS Curtails W-2 Filing Extensions in Bid to Fight Tax Fraud

The Internal Revenue Service moved today against identity theft & tax refund fraud by allowing only 1 30 day nonautomatic extension of time for filing extensions of W-2 forms instead of the system as it is now.


In final & temporary regulations (TD 9730), the IRS said identity thieves & “unscrupulous preparers” often file electronically early in the filing season, leaving the agency unable to verify wage & other information from the W-2 providers until a good deal later. The new rules are to apply starting in Tax Year 2016 filing season (filed in 2017), leaving the automatic extension available in Tax Year 2015 (filed in 2016).

The IRS also released proposed regulations (REG-132075-14) incorporating the temporary regulations & seeking comments by November 12th on matters including whether any transitional considerations should be allowed for a category of forms or filers.

What does this mean for you?

Final, Temporary regulations: (Effective for forms filed after Dec 31, 2016)
  • W-2’s Only
  • No more automatic 30-day filing extensions.
  • Only non-automatic 30-day filing extensions.
Proposed regulations:
  • Same as above but also adds forms W-2G, 1094/5, 1098, 1099, 5498, and 1042-S.
The IRS warns that it will grant the single non-automatic extension under the temporary regulations “only in very limited cases” where the filer or transmitter demonstrates that an extension is needed due to extraordinary circumstances or catastrophe, such as the destruction of records in a fire or a natural disaster and which a statement must be signed under penalty of perjury.

Any forms filed after the original due date without the non-automatic extension will be subject to late filing penalties as follows (after 12/31/2015):
  • Tier 1 (within the first 30 days) – $50.00
  • Tier 2 (within 31 days & by August 1st) – $100.00
  • Tier 3 (after August 1st) – $250.00
Large Businesses with Gross Receipts greater than $5 million
Time of filingBefore 1/1/2015After 12/31/15
Late less than 30 days$30 / $250,000$50 / $500,000
Late by August 1$60 / $500,000$100 / $1,500,000
Late after August 1$100 / $1,500,000$250 / $3,000,000
TIN / Name Errors$100 / $1,500,000$250 / $3,000,000
Small Businesses with Gross Receipts less than $5 million
Late less than 30 days$30 / $75,000$50 / $175,000
Late by August 1$60 / $200,000$100 / $500,000
Late after August 1$100 / $500,000$250 / $1,500,000
TIN / Name Errors$100 / $1,500,000$250 / $1,500,000
Intentional Disregard$250 / no limitation$500 / no limitation
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