Enacted as part of the Energy Improvement and Extension Act of 2008, Section 6045B provides that any domestic or foreign corporation (or entity treated as a corporation for federal income tax purposes) must file an information return with the IRS or publish on its website certain information if an organizational action (such as a stock split, a merger or an acquisition) affects the tax basis of any “specified security.”34 With respect to organization actions occurring prior to 2012, a specified security was limited to stock in a corporation.35 The issuer generally must file the return within 45 days after the organizational action and must furnish a corresponding statement to each nominee of the stockholder by January 15th of the year following the calendar year of the organizational action. An issuer of stock is generally subject to a penalty under Section 6721 that does not timely file a correct issuer return with the IRS as required by Section 6045B(a). In addition, Section 6722 imposes a penalty on any issuer of stock that does not timely furnish correct issuer statements to stockholders as required by Section 6045B(c).
The IRS previously released Notice 2011- 18 which provided transitional relief from the information reporting requirements in 2011. Under Notice 2011-18 no penalties were imposed for failure to file an issuer return with the IRS within 45 days of an organizational action taken in 2011, provided that the issuer files the issuer return with the IRS (or posts the return to its website) by January 17, 2012.36
Based on the limited timeframe provided to taxpayers between guidance released by the IRS and the reporting requirements effective dates, the IRS issued Notice 2012- 11, where, in lieu of filing the required form with the IRS, the IRS will permit an issuer to publicly report an organizational action by posting either the required form or the required information to its website. The issuer will be treated as filing the required information on the date of posting.37 Penalties under Section 6721 and 6722 will not be imposed on issuers that report incorrect information while employing goodfaith efforts to timely post the required form/ information on its website or to file the required form with the IRS. This transitional relief is limited to reporting organizational actions occurring in 2011.