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Final Regulations Regarding Extensions of Time for Pass-Through Entities to File Returns

Published: June 24th, 2011

By: Matthew J. Ahearn

Today, the Treasury Department and IRS issued final regulations concerning automatic extensions of time to file returns for pass-through entities (i.e., partnerships, s-corporations, trusts and estates). The regulations are effective today (June 24, 2011). Prior to 2008, pass-through entities could obtain an automatic six (6) month extension of time to file their income tax returns. In 2008, temporary and proposed regulations were issued that reduced the automatic extension period to five (5) months for certain pass-through entities (most partnerships, estates and certain trusts). This rule was effective for pass-through entities filing returns on or after January 1, 2009.

The automatic extension of time to file a return for pass-through entities was limited to five (5) months to provide individual and corporate taxpayers, who can obtain a six (6) month extension, enough time to complete their own income tax returns on which the pass-through items must be reported. The Treasury Department and IRS recognized that the five (5) month automatic extension for pass-through entities did not solve reporting problems faced by trusts, which are deemed to be pass through entities for this purpose, that owned interests in other pass through entities, such as partnerships; however, the Treasury Department and IRS believe that including trusts in the five (5) month extension of time rule struck a reasonable balance among competing interests.