Broker Reporting Progress Stalled

It appears that the first wave of broker reporting to taxpayers (effective for tax year 2011) of tax basis related to various forms of securities sales may not have gone so smoothly.

Recall that The Emergency Economic Stabilization Act of 2008 precipitated all of this, and it would seem that five years or so would permit brokers enough time to get their systems in place to all for all of this to flow smoothly.

But in recent IRS Notice 2012-34, IRS announced that it intends to delay the effective dates for the reporting of debt instruments and options by brokers and othersĀ — after consideration of comments and testimony received from industry “squeaky wheels”, who have apparently expressed the view that the most recently proposed effective date of January 1, 2013 doesn’t provide them sufficient time to build and test the systems necessary to enable them to comply.

As such, IRS exhibits unusual largesse in delaying the relevant ruleĀ — the final regulations under Code Section 6045(g) won’t apply to a debt instrument or option acquired before January 1, 2014.