Expect Form 2290 Filing Delays This Year

CARRIERS VIOLATING SAP REGULATIONS

It has been brought to my attention that some motor carriers have and are skirting their Substance Abuse Professionals (SAP) obligations. It seems that some carriers, after firing a driver for failing a drug/alcohol test, are not fulfilling their legal obligation of giving an SAP list to the owner-operator or driver upon their dismissal. Although many carriers have a zero tolerance policy on drugs, and it is within their rights to let these drivers go, they are still obligated to provide the list to these drivers who have tested positive under Section 40.287. More importantly, NTA was recently made aware of several situations in which motor carriers were found to be non-complaint and charged with substantial fines because these lists were not given. This is just another reason to choose an accredited drug and alcohol program. A good program will automatically send this list to the driver upon termination, along with a proof copy to the motor carrier for their records.

EXPECT FORM 2290 FILING DELAYS THIS YEAR

It’s that time of the year again – when the Federal Highway Use Tax, for heavy motor vehicles operated on public highways, must be paid to the Internal Revenue Service (Form 2290). Unfortunately, there may be some delays this year in the opening of the 2011/2012 annual filing season for Form 2290, but the fees will still be due at the normal time (by August 31st). The IRS has not yet published the final version of the Heavy Highway Vehicle Use Tax Return, nor are they accepting e-filings at this time.

The IRS has made some changes to Form 2290 and Congress has yet to approve the changes. And with bigger issues on their plate right now, they may not act quickly enough to restore a normal annual tax filing. The IRS will wait as long as possible but, in case that doesn’t happen, they already have a back-up plan in place so that a 3-month tax (July, August and September) can be collected by the August 31st filing deadline. Once they figure all this out, you will have to act quickly, so you might as well get all your ducks in a row and start preparing now.

One of our newer partner companies (www.2290tax.com) is ready to help you now with your 2011/2012 tax returns. You can take advantage of the extra time you have available and “Start a Return” for yourself. That way, if the filing deadline is not pushed back and the filing season is shortened you will be ready! Make all the updates to your company and fleet for the 2011/2012 year and then stop when you get near the end. The return is then saved for you to finish at a later date. Once Congress and the IRS finalize the form for the current year, they (the website) will send you an e-mail notice that the filing season is open and that your return can be filed. All you will have to do is log back into the website, resume the return you have already created, and then submit it for e-filing. The website will then recalculate the taxes due automatically and create a correct return. It is really easy.

For those of you who do not know much about this tax, you must file Form 2290 and Schedule 1 for the period of July 1st of the current year through to June 30th of the next year if a taxable highway motor vehicle is registered, or required to be registered, in your name under any state, the District of Columbia, Canadian or Mexican law at the time of its first use during the period. The tax applies to highway motor vehicles having taxable gross weights of 55,000 lbs. or more and includes trucks, tractors and buses. You may be an individual, a corporation, a partnership or any other type of organization (including a nonprofit charitable, educational, etc). Schedule 1 is used to list all of your reportable vehicles by category and vehicle identification number (VIN).

Proof of payment of this tax is required in order to register your vehicle in any jurisdiction, both for the first time and at renewal time. Proof of payment consists of a receipted Schedule 1 of Form 2290 “Heavy Highway Vehicle Use Tax Return” stamped and returned to the taxpayer by the IRS after the taxpayer has paid the tax on the vehicle. Form 2290 is used to figure and pay any tax on heavy vehicles, or to claim exemptions from the tax when vehicles are expected to be used on public highways 5,000 miles or less (7,500 miles or less for agricultural vehicles) during the tax period. Additional returns must also be filed if the taxable gross weight of a vehicle increases during the tax period. The tax period begins on July 1 and ends on the following June 30, and you must pay the full year’s tax on all vehicles that you have in use during the month of July. The tax can be paid in a single payment with your return, or in four equal installments.

All Canadian and Mexican registered vehicles that operate in the United States must also pay the tax, however their rate is reduced by 25%. The reduced tax applies whether or not the vehicles are also required to be registered in the United States.

Records must be kept for all taxable highway vehicles registered in your name, and kept for at least 3 years after the date the tax is due or paid. You should also keep copies of all returns and schedules you have filed. Full instructions attached to Form 2290 show who must file, where to file, exemptions from filing, how to pay the tax, record keeping requirements, determining the taxable gross weight and other general information. Forms are available at any local IRS office or they may be obtained online (www.irs.gov). This return must be filed for any vehicle being licensed for over 55,000 lbs. in a United States jurisdiction – even if the vehicle is exempt from paying the tax. States will not accept your license registration or renewal applications without a copy of the stamped Schedule 1 returned to you from the IRS.

With all of this uncertainty, it just makes sense to start your return online now and be ready to go. If you wait to see what happens, you may find yourself scrambling at the end, waiting on the postal service, hoping to get everything done on-time. Why risk it and put yourself through that misery? Get everything prepared now so that once the government gets their act together, you are ready!