n-17-71.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Relief for Partnerships, REMICs, and Certain Other Entities Performing Any Acts by the
Due Date in Effect Before the Enactment of the Surface Transportation Act

Notice 2017-71

PURPOSE

This notice provides that any act performed for the 2016 taxable year of a
partnership, real estate mortgage investment conduit (REMIC), or certain other entities
will be treated as timely for all purposes under the Internal Revenue Code (the Code),
except with respect to interest under section 6601 of the Code, if the act would have
been timely if the Surface Transportation and Veterans Health Care Choice
Improvement Act of 2015 (the Surface Transportation Act), Public Law 114–41, 129
Stat. 443 (2015), had not changed the due date for partnership returns.
Notice 2017-47, 2017-38 I.R.B. 232, is amplified, clarified, and superseded.
BACKGROUND
Section 2006 of the Surface Transportation Act amended section 6072 of the Code
and changed the date by which a partnership must file its annual return with the Internal
Revenue Service (IRS). The due date for filing the annual return of a partnership
changed from the fifteenth day of the fourth month following the close of the taxable
year (April 15 for calendar-year taxpayers) to the fifteenth day of the third month

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following the close of the taxable year (March 15 for calendar-year taxpayers). The new
due date applies to the returns of a partnership for taxable years beginning after
December 31, 2015.
A REMIC is not a partnership, but under section 860F(e) it is generally treated as a
partnership for purposes of subtitle F, “Procedure and Administration,” of the Code. For
example, under § 1.860F-4(b)(1) of the Income Tax Regulations, the due date and
availability of any extension of time for filing a REMIC’s annual return are determined as
if the REMIC were a partnership. As a result, the new due date also applies to the
returns of a REMIC for taxable years beginning after December 31, 2015.
The due date for the return of a bank with respect to a common trust fund, commonly
filed on Form 1065, “U.S. Return of Partnership Income,” is administratively tied to the
due date of the return of a partnership under § 1.6032-1T of the Income Tax
Regulations. Similarly, the annual return filed by a religious or apostolic association or
corporation on Form 1065 is to be filed on the due date of a partnership return under
§ 1.6033-2T(e) of the Income Tax Regulations.
Partnerships filing Form 1065 and Form 1065-B, “U.S. Return of Income for Electing
Large Partnerships,” are affected by the Surface Transportation Act amendment. These
partnerships may also file Form 8804, “Annual Return for Partnership Withholding Tax
(Section 1446),” and Form 8805, “Foreign Partner's Information Statement of Section
1446 Withholding Tax,” which are generally due to the IRS on the same date as the
partnership’s Form 1065 or 1065-B. Filers of Form 1065 must furnish their partners with
Schedules K-1, “Partner's Share of Income, Deductions, Credits, etc.,” by the due date
of the Form 1065, and filers of Form 1065-B must furnish their partners with Schedules

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K-1 by the first March 15 following the close of the partnership’s taxable year. Filers of
Form 8804 that are required to file Forms 8805 must also furnish their partners with
their respective copies of Forms 8805 by the due date of the Form 8804. Some
partnerships must also file additional returns, such as Form 5471, “Information Return of
U.S. Persons With Respect to Certain Foreign Corporations,” by the due date of the
Form 1065 or 1065-B. A REMIC must file Form 1066, “U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return,” by March 15.
A partnership can obtain a six-month extension of time to file Form 1065, 1065-B, or
8804, and a REMIC can obtain a six-month extension of time to file Form 1066, by filing
Form 7004, “Application for Automatic Extension of Time to File Certain Business
Income Tax, Information, and Other Returns,” by the statutory due date of those returns.
A partnership that receives an extension of time to file Form 1065 receives a concurrent
extension of time to furnish its partners with Schedules K-1. Also, a partnership that
receives an extension of time to file Form 8804 receives a concurrent extension of time
to file Forms 8805 and to furnish respective copies of the Forms 8805 to its partners.
The six-month extension may apply to additional returns that a partnership may be
required to file by the due date of its Form 1065 or 1065-B, but it does not affect the due
date for a partnership filing Form 1065-B to furnish its partners with Schedules K-1.
An entity that fails to timely meet its obligations to file and furnish returns is subject to
penalties. An entity that fails to file Form 1065, 1065-B, 1066, or 8804 by the due date
(with regard to extensions) is subject to penalty under section 6698 or 6651 of the
Code. A partnership that fails to file Forms 8805 by the due date (with regard to
extensions) is subject to penalty under section 6721. A partnership that fails to furnish

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Schedules K-1 or the partner copies of Forms 8805 by the due date is subject to penalty
under section 6722. A partnership that fails to file Form 5471 by the due date is subject
to penalty under section 6038 or 6679. An entity that fails to file additional documents
that it is required to file by the due date of its Form 1065, 1065-B, or 1066 may also be
subject to other penalties.
In addition to the obligation to file returns with the IRS and furnish copies to
recipients, an entity may be required to take various other actions, such as making
elections, contributing to an employee pension plan, or paying tax, by the due date of its
return, either with or without regard to any extension of time to file, depending upon the
particular action. A nonexclusive list of examples of these actions is below:
• Section 860D(b)(1) provides that an entity that meets the requirements for a
REMIC classification under section 860D(a) may elect to be treated as a REMIC
for its first taxable year and that the election must be made on the entity’s income
tax return for its first taxable year. Section 1.860D-1(d)(1) of the Income Tax
Regulations identifies that return as a timely Form 1066.
• Section 475(e) of the Code allows a dealer in commodities to elect mark-to-
market accounting for commodities. Section 475(f) allows a similar election for
traders in securities or commodities. To make an election under either section
475(e) or (f), Rev. Proc. 99-17, 1999-1 C.B. 503, provides that a taxpayer must
file an election statement not later than the due date (without regard to
extensions) of its income tax return for the taxable year immediately preceding
the election year. The election statement must be attached to either the

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taxpayer’s original income tax return or, if applicable, to a request for an
extension of time to file that return.
• Section 1.1092(b)-4T(f)(1) of the Income Tax Regulations generally provides that
the election to establish one or more mixed straddle accounts (a mixed straddle
election) for a taxable year must be made by the due date (without regard to
extensions) of the taxpayer’s income tax return for the immediately preceding
taxable year. In order to make the mixed straddle election, a taxpayer must
attach Form 6781, “Gains and Losses from Section 1256 Contracts and
Straddles,” to the taxpayer’s income tax return (or request for an automatic
extension) for the immediately preceding taxable year.
• Section 1295(b) of the Code permits a U.S. person who owns stock in a passive
foreign investment company (PFIC) to elect to treat the PFIC as a qualified
electing fund (QEF) by making the election on Form 8621, “Information Return by
a Shareholder of a Passive Foreign Investment Company or Qualified Electing
Fund,” filed with its income tax return on or before the due date (with regard to
extensions) of its income tax return.
• Section 1.1296-1(h) of the Income Tax Regulations permits a U.S. person who
owns marketable stock in a PFIC to elect to recognize gain or loss on the sale of
the PFIC shares at the end of the year by making the election on Form 8621 and
filing it with an original or superseding income tax return on or before the due
date (with regard to extensions) of the income tax return for that year.
• Section 4980D of the Code and §§ 54.6011-2 and 54.6071-1(b)(1) of the Pension
Excise Taxes Regulations require an employer who fails to meet certain group

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health plan requirements under chapter 100 of the Code to file Form 8928,
“Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue
Code,” and pay an excise tax on or before the due date of its income tax return
(without regard to extensions).
• Section 404(a)(6) of the Code provides that an employer’s contribution payment
to an employee’s benefit plan shall be deemed made on the last day of the
preceding taxable year if the payment is on account of that taxable year and is
made not later than the due date of the employer’s income tax return for that
taxable year (with regard to extensions).
Many entities took the acts for the first taxable year beginning after December 31,
2015, by the date previously required by section 6072. If not for the Surface
Transportation Act, these acts would have been timely.
DISCUSSION
The IRS will treat acts of any (a) partnership, (b) REMIC, or (c) entity that may
properly file a Form 1065—such as a bank (with respect to the return of a common trust
fund), or a religious or apostolic association or corporation—and in fact filed a Form
1065, as timely for the first taxable year that began after December 31, 2015, and
before January 1, 2017, if the entity took the act by the date that would have been
timely under section 6072 before amendment by the Surface Transportation Act (April
18, 2017, for calendar-year taxpayers, because April 15 was a Saturday and April 17
was a legal holiday in the District of Columbia). However, the entity will be liable for any
interest due under section 6601 from the date prescribed for payment until the date the
payment was actually made.

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An entity that has already been assessed a penalty for failure to timely file a return
that is deemed timely filed under this notice can expect to receive a letter within the next
several months notifying it that the penalty has been abated. For other acts deemed
timely under this notice, such as elections, an entity should file its returns consistent
with the treatment of the acts as being performed timely as provided by this notice, and
need not take further action to obtain relief unless contacted by the IRS. For
reconsideration of a penalty covered by this notice that has not been abated by
February 28, 2018, contact the number listed in the letter that notified you of the penalty
or call (800) 829-0115 and state that you are entitled to relief under Notice 2017-71.
Taxpayers who qualify for relief under this notice will not be treated as having received
a first-time abatement under the IRS’s administrative penalty waiver program.
EFFECT ON OTHER DOCUMENTS
This notice amplifies, clarifies, and supersedes Notice 2017-47, 2017-38 I.R.B. 232.
DRAFTING INFORMATION
The principal author of this notice is Jonathan R. Black of the Office of the Associate
Chief Counsel (Procedure and Administration). For further information regarding this
notice contact Jonathan R. Black at (202) 317-6845 (not a toll-free number).