IRS Denies Wall Street Firms Extra Time For Dividend Reporting

by Leroy Baker, Tax-News.com, New York

13 January 2004

IRS Commissioner Mark Everson has turned down a request by the Securities Industry Association for an industry-wide extension to the dividend reporting deadline, which would give firms time to accurately calculate clients' tax liabilities in the light of the many changes legislated in 2003.

Securities firms had asked for a 30-day extension to the January 31st deadline for the filing of Form 1099, worried that they may have to send out millions of corrected tax notices to clients who in turn could be forced to amend previous tax returns.

“While I appreciate the challenges faced by the information reporting community…I must also consider the needs of the taxpaying public as a whole,” commented Everson in a written response to the SIA.

“Millions of taxpayers file early in order to obtain a refund and depend on receiving timely information statements. In addition, a blanket extension would create significant hardships for taxpayers who rely on the early receipt of these statements for other reasons. For instance, parents of college students requesting financial aid and scholarships, who have a narrow timeframe to submit their financial statements, often require copies of completed income tax returns,” Everson observed.

Nevertheless, the IRS Commissioner accepted that “individual members of the information reporting community may have difficulty in timely meeting their filing obligations,” adding that the IRS would “carefully consider” any applications for a thirty-day extension for Form 1099 filing on a case-by-case basis as laid down in the Income Tax Regulations.

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