The IRS Is A Master of the Obvious!
The IRS announced today that the Form 8939 (more on that below) will not be due for filing on April 18, 2011. The reason provided by the IRS is not that the filing date has been extended, but because the IRS has not yet created and released the tax form for use by taxpayers.
Can there be doubt about why our tax system is such a mess? How in the world are people supposed to comply with a tax system that works in such a crazy fashion? Sorry, but I don't have the answers, I just wanted to provide you with the "through the looking glass" experience of dealing with our tax system and the numerous and complex forms that are required of taxpayers.
Now for Form 8939. Do you remember back in 2010 when there was no estate tax. It had been replaced with a new carryover basis system. The reporting obligations for that were supposed to be made on the new IRS Form 8939.
In December of 2010, Congress through those rules out the window (actually a very good result for taxpayers) by passing a new estate tax system retroactive to January 1, 2010. Under the new law, presently in effect, the $5 million exemption against the federal estate tax was made retroactive to 1/1/2010
However, since Congress passed the new law at the end of 2010 and since just a few people had died in 2010 expecting there to be no estate tax, 2010 estates have a choice. 2010 estates can elect to either go with the "no estate tax system" which is no longer law, or with the $5 million dollar exemption system which is now the law.
Estates desiring the "no estate tax" system, like the Estate of George Steinbrenner, are required to use Form 8939.
And as of today, 4/15/2011, per the IRS notice I am reporting on, that Form will not have to be filed on time (4/18/2011) only because Form 8939 doesn't exist since the IRS hasn't created it yet. By the way, I have the IRS draft Form 8939 in my possession. I can tell you that the reason there is no Form 8939 is that the IRS doesn't yet understand the new tax law passed by Congress and how the optional carryover basis system works. That's ok, no one else does either.
If you haven't yet, get those quarterly estimates in and remember tax day for 2011 is April 18th.
Let me know what you think about this article and join our conversation by commenting. Thank you.
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