Tax Administration Simplification Act
The Tax Administration Simplification Act makes several changes aimed at reducing friction in how taxpayers interact with the IRS. It extends the deadline for small businesses to elect S corporation status, giving more time by allowing the election to be filed up to the S-corporation return due date (including extensions). It also shifts certain individual estimated tax payment due dates one month later (July 15 and October 15) and expands the “mailbox rule” to apply to electronic filings and payments, so a submission transmitted before the deadline but received after can be treated as timely. The bill includes added revocation flexibility (late revocations can be treated as timely if there is reasonable cause) and adds coordination provisions for related S-subentity rules. Regulations to implement the new electronic filing/payment rule would be issued within a year. Overall, the Act seeks to modernize timing rules and reduce penalties from administrative delays or filing timing.
Key Points
- 1Extends the S-corporation election window: an election can be made for a given taxable year up to the due date of the S-corporation tax return for that year, including extensions (with related conforming changes to the existing rules).
- 2Adds a new timely-election option and Secretary authority: elections may be made on a timely filed return, and the Secretary may issue regulations and guidance to implement these changes.
- 3Revocation relief: adds a new provision allowing late revocations of S-corp status to be treated as timely if the Secretary determines there was reasonable cause for the delay.
- 4Shifts individual estimated tax due dates: the quarterly installment dates are moved from June 15 to July 15 and from September 15 to October 15.
- 5Extends the mailbox rule to electronic submissions/payments: if a document or payment is transmitted electronically before the due date but received after, the transmission date is treated as the filing/making date; requires regulations to implement this within a year.
- 6Effective dates: most amendments apply to elections for taxable years beginning after the enactment’s year-end date; revocation changes apply to revocations after enactment; the electronic filing/payments rule applies to documents/payments sent one year after enactment.