How do we reconcile all the guidance out there? To LW’s point, from the F8082 instructions:
Also use the form to notify the IRS if you did not receive Schedule K-1, Schedule Q, or a foreign trust statement from the foreign trust by the due date for filing your return (including extensions).
This is implying that if you extended your 2017 1040, but haven’t received the S-corp K1 by 5/17/18 (today), you wouldn’t use F8082 if you file your 1040 today, for example, because the extended due date of your 1040 hasn’t arrived yet.
By the same logic, though, if you filed your 2017 1040 on 4/10/18, and hadn’t received the K1 by then, you still wouldn’t use F8082 because the original 1040 due date hasn’t arrived yet. I mean, you truly won’t know if you don’t get the K1 by 4/17/18 until 4/17/18 comes and goes.
And then we have IR-2004-51:
Identify “estimated” K-1 income. When the Schedule K-1 has not been received at the time the Form 1040 is filed, the income should be estimated. Form 8082, Notice of Inconsistent Treatment or Amended Return, should be used to identify estimated K-1 income or when the investor disagrees with the amounts reported on the K-1.
Unlike the Form Instructions, this guidance makes no reference to the original or extended due date of the 1040. It only speaks to, “at the time the Form 1040 is filed.”
And here’s what the Code actually says (Sec 6037):
(c) Shareholder's return must be consistent with corporate return or secretary notified of inconsistency.
(1) In general.
A shareholder of an S corporation shall, on such shareholder's return, treat a subchapter S item in a manner which is consistent with the treatment of such item on the corporate return.
(2) Notification of inconsistent treatment.
(A) In general. In the case of any subchapter S item, if—
(i)
(I) the corporation has filed a return but the shareholder's treatment on his return is (or may be) inconsistent with the treatment of the item on the corporate return, or
(II) the corporation has not filed a return, and
(ii) the shareholder files with the Secretary a statement identifying the inconsistency,
paragraph (1) shall not apply to such item.
This is confusing, since in (c)(2)(A)(i)(II), the statement is made: “the corporation has not filed a return.” What does that mean…the corporation hasn’t filed a return by the time the shareholder files his 1040 or the corporation hasn’t filed a return by the corporation’s original F1120S due date or its extended F1120S due date?
If it means the former, then the Code is consistent with IR-2004-51. If it means the latter, then the Code is consistent with the F8082 instructions.
It seems that the IRS has put forth some inconsistent guidance on inconsistent treatment…