D.C. Combined Reporting - Transition Rules for 3/15 and 4/15!

I have been working with several clients on applying the new D.C. Combined Reporting rules to determine which entities should be included in one D.C. Combined return.  The ownership tests and unitary tests are more complicated than you may think. Hence, if you haven't addressed the implementation of D.C. combined reporting for your business, please contact me as soon as possible.

If 2012 will be the first year that your business (group of entities) files a D.C. combined return, the selection of the "designated agent" is extremely important, as this will impact what type of D.C. return is filed, and when the 2012 return is due (generally, either March 15th or April 15th).

In addition, 2013 estimated payments will need to be made by the "designated agent" and not by the separate entities that will be included in the combined return.  Therefore, you need to select the appropriate entity to be the "designated agent.

Also, specific "transition rules" will impact how you file your 2012 extensions for each entity and will determine whether those extensions are due March 15th or April 15th. 

The complexity of this analysis and the new compliance burden is something that, unfortunately, companies need to deal with.  It may cost more now, but the effort should reduce headaches later on.