Urgent News for Some 2011 DC Corporate filers - DC announces one month delay to 10/15 for DC Corporate Franchise Tax Combined Reports 

    Sept. 11, 2012
    Tax Section News
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    DC Permits Corporate Combined Reports Filing Delay until 10/15 – New Combined Reporting Rules Released 8/31/12 to Apply to 2011 Returns

    On Sept 7, the District of Columbia (DC) announced a one month delay in the extended due date this year from 9/17/12 to 10/15/12 for filing DC corporate franchise tax returns for combined reports. This is because on Aug 31, the DC Office of Tax and Revenue (OTR) issued its second set of proposed regulations on combined reporting. Original regulations (proposed 1/20/12) have been revised to reflect feedback received during the 30-day comment period.

    According to the announcement, effective for tax years beginning after December 31, 2010, corporations that are members of a combined group and that must report income derived from the activities of that group in a combined report (‘combined reporting filer’) on September 17, 2012, will receive an automatic extension until October 15, 2012, in lieu of the six-month extension allowed to file their combined report.

    To ensure that each entity included in the combined report is properly reported, determined, computed, assessed, collected, or adjusted, the OTR is allowing combined reporting filers extra time to file as it says it “is reasonable in light of the significant and complex tax law change in the District and the compliance challenges for combined reporting filers.” Taxpayers have until 9/7/12 to submit comments on the amended regulations. Subject to any changes, the regulations are expected to become final on September 14, 2012, meaning they will be applicable to 2011 returns being filed now.

    Extension Announced for Filing the FAS 109 Worksheet

    Also, on Sept 5, DC announced an extension of time to file FAS 109 worksheet until the due date for the 2012 franchise tax returns. Any taxpayer intending to claim the FAS 109 deduction would have been required to file a FAS 109 Worksheet with the group’s combined report with the Chief Financial Officer on or before September 15, 2012, specifying the total amount of the deduction which the taxpayer claims. Because of comments to the revised proposed regulations, the OTR will amend the proposed regulations to extend the due date for the FAS 109 Worksheet to the due date for the 2012 Franchise Tax Returns.

    For more on these issues, here are additional links that may be helpful:
    • DC OTR webpage on Combined Reporting
    • OTR Notice 2012-07 - Combined Reporting: An Additional Month Extension for Combined Reporting Filers with September 17, 2012 Due Dates
    • OTR Notice 2012-07 - Combined Reporting – Extension of Time to File FAS 109 Worksheet
    • 1/20/12 first set of proposed regulation
    • 8/31/12 second set of proposed regulations
    • 8/31/12 DC OTR Announcement of second set of regulations on combined reporting
    • DC Official Code with combined reporting relevant sections (§47-1801.04-§47-1810.08)
    • FAQs on combine reporting, unitary businesses, etc.

    The AICPA State and Local Tax Technical Resource Panel will continue to monitor for developments and will keep members informed.

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