IRS Updates List of Delayed Tax Forms

The Internal Revenue Service warned small businesses and their tax preparers Wednesday that a group of tax return forms should not be filed until it is ready to start processing them.

The delay affects both paper and electronic filers, the IRS noted.

The tax credits and deductions relate to those that expired at the end of 2009 and were renewed in December by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which was enacted December 17.

The list of business forms, as of Wednesday, was:

•  Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return
•  Form 941 (First Quarter 2011), Employer's Quarterly Federal Tax Return
•  Form 709, U.S. Gift Tax Return
•  Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return

•  Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return for non-resident
•  Form 8849 Schedule 3 (Calendar year 2011), Certain Fuel Mixtures and the Alternative Fuel Credit

The IRS warned a few days after the passage of the Bush-era tax cuts extension law that it would not be able to process returns that itemize deductions on Schedule A as well as returns claiming some education-related tax deductions (see IRS Says Tax Season Will Be Delayed for Some).

The IRS has been updating the list of forms affected by the delay (see IRS Delays More Forms for Filing This Season). It expects to allow itemized returns to be filed starting February 14 (see IRS to Start Processing Itemized Returns on Feburary 14).

On the individual side, the list of affected forms includes the following:

• Schedule A (Form 1040), Itemized Deductions
• Form 8917, Tuition and Fees Deduction
• Educator Expense Deduction claimed on Form 1040, Line 23, and Form 1040A, Line 16
• Form 4684, Casualties and Thefts
• Form 8859, District of Columbia First-Time Homebuyer Credit

The IRS added that a few other taxpayers will also need to wait to file, due to the impact of other recent changes, primarily some of those included in the Small Business Jobs Act of 2010. Those affected forms include:  

• Form 3800, General Business Credit
• Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands(if certain credits claimed)
• Form 5405,  First-Time Homebuyer Credit and Repayment of the Credit (page 2 only)
• Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit
• Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands (if certain credits claimed)
• Form 8834, Qualified Plug-In Electric and Electric Vehicle Credit
• Form 8844, Empowerment Zone and Renewal Community Employment Credit
• Form 8910, Alternative Motor Vehicle Credit
• Form 8936, Qualified Plug-In Electric DriveMotor Vehicle Credit