On January 23, 2017, TEI updated its state and local tax policy statement regarding the Reporting of Federal Income Tax Adjustments. The original policy statement, issued in November 2015, noted that states vary substantially regarding the amount of time to report such changes and the triggers for reporting of such changes. TEI thus recommended a reporting time of at least 180 days, uniform triggers, and the option for taxpayers to report changes using a streamlined report similar to the Federal 1120X rather than filing an amended state tax return. The updated policy expands upon these concepts by fine tuning the definition of a federal “final determination” requiring taxpayers to report federal changes to the states, including a provision that would enable taxpayers to provide notice of a federal change (without filing a full report) if the impact on the taxpayer’s state tax liability is de minimis, and adding a provision enabling taxpayers to make estimated payments prior to the issuance of a federal final determination, thus tolling interest expenses.
TEI's policy statement was prepared under the aegis of TEI's State and Local Tax Committee, whose chair is Jamie Fenwick. TEI Tax Counsel Pilar Mata coordinated the preparation of the statement.