Close
Close

Highway bill changes Form 5500 deadline and gives IRS new collection tools

RFP
Highway bill changes Form 5500 deadline and gives IRS new collection toolsThe president has signed into law a highway funding bill that reverses a recent change in the extended deadline for Form 5500, resurrects the IRS private debt collection program and authorizes the State Department to deny or revoke passports for individuals with delinquent tax debt of more than $50,000.

The bill re-authorizes funding for transportation for five years and extends the excises taxes on tires, heavy vehicles and fuels that are used to fund highway spending. There had been some discussion of adding international tax reform or extensions of the expired provisions to the highway bill, but international reform has so far proved too ambitious and Congress is still negotiating an agreement on the extenders.

The final highway bill includes only three unrelated tax provisions to help cover a funding shortfall:

  1. Form 5500 extended filing deadline -- The bill reverses a change in the extended due date for Form 5500, Annual Return/Report of Employee Benefit Plan, which was enacted in the short-term highway funding extension just a few months earlier. The previous bill allowed extensions from the original due date of 3½ months instead of 2½. This provided an extended due date of Nov. 15 instead of Oct. 15 for calendar year plans. The bill eliminates this change, preserving the 2½ month extension and the Oct. 15 extended deadline.  
  2. Private debt collection -- The bill directs the IRS to resurrect a private debt collection program allowing third-party collection agencies to collect tax debt that is not in the IRS’s active collection inventory, has not been assigned to an IRS employee or for which a year has passed since the IRS interacted with the taxpayer. The IRS last contracted with private debt collection companies from 2006 to 2009 before ending the program because the IRS argued it could more efficiently perform the work itself.
  3. Passport denial for tax debt -- The bill authorizes the State Department to deny or revoke passports for taxpayers who have outstanding delinquent tax debt of more than $50,000 for which a notice of lien or levy has been filed.

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.