The late-year 2015 tax extenders law grabbed headlines, but two other federal laws enacted in 2015 may also have an impact on your tax planning. Here’s an overview of selected provisions of the Bipartisan Budget Act and the Fixing America’s Surface Transportation Act.
Bipartisan Budget Act
This law includes changes in the way the IRS audits certain partnerships. Under former rules, the IRS had three sets of procedures to audit partnerships or limited liability companies that elected to be treated as partnerships. Now, the IRS will follow a “streamlined” approach that will apply to all partnerships. The rules are mandatory for tax years beginning after 2017, though partnerships can choose to have them apply now. Partnerships with 100 or fewer partners can opt out.
The Budget Act also addresses a provision in the Affordable Care Act (ACA). Under ACA, employers with 200 or more full-time employees had to automatically enroll new full-time employees in a health benefit plan and automatically continue coverage during the open enrollment period. This was repealed.
Fixing America’s Surface Transportation (FAST) Act
Under the FAST Act, the IRS can ask the State Department to revoke or deny passports to tax debtors who owe more than $50,000 in back taxes, interest, and penalties. The rule doesn’t apply to taxpayers with an IRS-approved installment plan or those qualifying for innocent spouse relief.
In addition, the FAST Act requires the IRS to use debt collectors in certain situations, such as when the IRS can’t locate the taxpayer, the IRS has not assigned an employee to collect the tax debt, or more than a year has elapsed since the IRS contacted the taxpayer.
The FAST Act also repealed the automatic 3½ month extension for certain employee benefit plans. Instead of an extended due date of November 15 for filing calendar year Forms 5500, the previous 2½ month extension (until October 15 for calendar year filers) was restored.