Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 38023 

collection of information, including 

suggestions for reducing the burden, to 

Jasmeet K. Seehra, Office of 

Management and Budget, by email at 

jseehra@omb.eop.gov or by fax to (202) 

395–7285. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under Executive Order 

13132. 

4. The provisions of the 

Administrative Procedure Act (5 U.S.C. 

553) requiring notice of proposed 

rulemaking and the opportunity for 

public participation, and a delay in 

effective date, are inapplicable because 

this regulation involves a military or 

foreign affairs function of the United 

States (see 5 U.S.C. 553(a)(1)). This rule 

implements a necessary update of the 

status of South Sudan as a U.S. 

embargoed country, consistent with the 

prohibitions implemented in the ITAR 

by the Department of State. This rule 

also serves to prevent confusion by the 

public as to the current EAR export and 

reexport license requirements 

applicable to South Sudan. A delay in 

the effective date would frustrate the 

achievement of this goal. Further, no 

other law requires that a notice of 

proposed rulemaking and an 

opportunity for public comment be 

given for this rule. Because a notice of 

proposed rulemaking and an 

opportunity for public comment are not 

required to be given for this rule under 

5 U.S.C. 553, or by any other law, the 

requirements of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) are 

not applicable. 

List of Subjects in 15 CFR Part 740 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

Accordingly, part 740 of the Export 

Administration Regulations (15 CFR 

parts 730–774) is amended as follows: 

PART 740—[AMENDED] 

■ 1. The authority citation for part 740 

continues to read as follows: 

Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 

1701 et seq.; 22 U.S.C. 7201 et seq.; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Notice of August 15, 2017, 82 

FR 39005 (August 16, 2017). 

■ 2. Amend Supplement No. 1 to Part 

740 by adding, in alphabetical order, an 

entry for ‘‘South Sudan, Republic of’’ 

under ‘‘Country Group D’’ to read as 

follows: 

SUPPLEMENT NO. 1 TO PART 740— 

COUNTRY GROUPS 

* * * * * 

* * * * * 

Dated: July 26, 2018. 

Richard E. Ashooh, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2018–16612 Filed 8–2–18; 8:45 am] 

BILLING CODE 3510–33–P 

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. 

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 


amozie on DSK3GDR082PROD with RULESER03AU18.002</GPH>
38024 Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 

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 § 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 

§ 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)) crossreferencing 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 § 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 § 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, § 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 

§ 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 

§ 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 

§ 1.6081–8T, which replaced the 

regulation under § 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 § 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 nonautomatic 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 nonautomatic extensions of time to file by 

adding Form 1094–C, Form 3921, and 

Form 3922 to the list in § 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 


amozie on DSK3GDR082PROD with RULES
Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 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 nonautomatic extension would have been 

available on the same terms as the nonautomatic 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 

§ 1.6041–2(a)(3)(ii) and § 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 § 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 § 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 


amozie on DSK3GDR082PROD with RULES
38026 Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 

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, 

§ 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 § 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 


amozie on DSK3GDR082PROD with RULES
Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 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 nonautomatic extension of time to file; for 

instance, when a filer does not timely 

receive the statement of sick pay 

required under § 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 nonautomatic 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 § 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 


amozie on DSK3GDR082PROD with RULES
38028 Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 

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 § 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 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

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

■ Par. 2. Section 1.6081–8 is revised to 

read as follows: 

§ 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-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.


amozie on DSK3GDR082PROD with RULES
Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / Rules and Regulations 38029 

TABLE 1 TO PARAGRAPH (a)(1)—Continued 

Form or form series Name of form 

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 

§ 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 

§ 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 

§ 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. 

§ 1.6081–8T [Removed] 

■ 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 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket Number USCG–2018–0027] 

RIN 1625–AA11 

Regulated Navigation Area; Lake 

Washington, Seattle, WA 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary regulated 

navigation area for certain navigable 

waters of Lake Washington. The 

regulated navigation area is intended to 

protect personnel and vessels moored in 

the vicinity and other vessel traffic from 

potential hazards created by vessel 

wake. Vessels transiting this area will be 

restricted to speeds that create a 

minimum wake. 

DATES: This rule is effective from 8 p.m. 

on August 3, 2018, through 11:59 p.m. 

on August 5, 2018. This rule will be 

enforced from 8 p.m. to 8 a.m. daily 

from August 3, 2018, through August 4, 

2018 and from 8 p.m. to 11:59 p.m. on 

August 5, 2018. 

ADDRESSES: To view documents 

mentioned in this preamble as being 

available in the docket, go to http://

www.regulations.gov, type USCG–2018– 

0027 in the ‘‘SEARCH’’ box and click 

‘‘SEARCH.’’ Click on Open Docket 

Folder on the line associated with this 

rule. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

email Petty Officer Zachary Spence, 


amozie on DSK3GDR082PROD with RULES