Two Important Reminders From IRS for 2017: W-2 Early Filing and Offshore Compliance

The New Year, 2017, promises to be a year of change. For employers, the most important immediate tax change is the new accelerated W-2 filing deadline, mandated by the 2015 PATH Act. Under this Act, employers are now required to file their copies of Form W-2, submitted to the Social Security Administration, by January 31. The new January 31 filing deadline also applies to some Forms 1099-MISC, which report non-employee compensation such as payments to independent contractors. The January 31 deadline for providing copies of these forms to employees remains unchanged. In the past, employers had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of W-2s and Forms 1099 to the government.

The rules for extensions of time to file these forms also have changed. Only one 30-day extension to file Form W-2 is available, and this extension is not automatic. If an extension is necessary, a Form 8809, Application for Extension of Time to File Information Returns, must be completed by January 31.

If you need advice on changing your processes to accommodate the new
W-2 and 1099 filing deadlines, consult with your Frazier & Deeter tax professional.

Offshore Voluntary Compliance Program

The IRS is encouraging those with offshore financial holdings to join 100,000 of their fellow taxpayers in disclosing their offshore accounts. Noting that the Offshore Voluntary Disclosure Program has collected $10 billion since 2009, the IRS warns that “…people’s ability to avoid detection becomes harder and harder.”

Under the Offshore Voluntary Disclosure Program, taxpayers must:

    • Come forward before the IRS catches them and before their financial institution is publicly under investigation or is known to be cooperating with the IRS.

    • Provide documents and information on foreign accounts and assets, institutions and facilitators, and sign agreements to extend the period of time for assessing tax and penalties.

    • Submit all account statements and pay the offshore penalty at the time of the voluntary disclosure program application.

    • Pay set penalties.

    • Agree to cooperate with IRS and Department of Justice offshore enforcement efforts by providing information about financial institutions and other facilitators who helped the taxpayer establish or maintain an offshore arrangement.

The deadlines for reporting offshore assets are different than other tax deadlines and the rules are complex. The tax professionals at Frazier & Deeter can help bring you into compliance and advise you throughout the process.