AICPA to IRS: Delay Upcoming Basis Reporting Deadlines

March 31, 2014

Members of the American Institute of CPAs (AICPA) and their clients experienced significant confusion as a result of the implementation of cost basis reporting for stocks and mutual funds during the 2013 filing season, Jeffrey A. Porter, chair of the AICPA Tax Executive Committee, wrote to the IRS in a March 4, 2014 comment letter.  He proposed that three future basis reporting requirement deadlines in final regulations, Treasury Decision (T.D.) 9616, be further delayed by one year each. 

The proposed extensions are:

• Move the reporting for initial tracking of cost basis for options and debt instruments from January 1, 2014 to January 1, 2015;
• Move the reporting for transfer reporting from January 1, 2015 to January 1, 2016; and,
• Move the reporting for complex debt instruments from January 1, 2017 to January 1, 2018.

“In many instances,” Porter wrote, “our members found the Forms 1099-B to contain inaccurate, incomplete or inconsistently reported information by various third party reporting entities.  The number of corrected Forms 1099-B was arguably greater than in prior years and many more original Forms 1099-B were received post February 15th.”

“We believe the delay in expanding basis reporting may allow additional time for these issues relating to basis reporting for stock and mutual funds to come to a resolution,” he wrote.

“Adding additional complexity by expanding those securities requiring basis reporting may strain the ability of third party reporting entities, software developers and tax preparers to provide complete and accurate data to both the IRS and taxpayers,” Porter stated.

The AICPA believes the proposed delays in reporting are necessary to reduce compliance burdens for individual taxpayers and to provide additional time for third party reporting entities to change their programming and processes to comply with the regulations.