Instructions For Form 1120-Reit - 2009 (Page 4 of 17) in pdf

close of the REIT’s tax year, unless the

appropriate “Quarter” box for income tax

tax. The amount of the penalty is

of 1%

REIT has maintained a fiscal year. The

deposits.

of the unpaid tax for each month or part of

two methods of depositing REIT income

a month the tax is not paid, up to a

For more information on deposits, see

taxes, including the capital gains tax, are

maximum of 25% of the unpaid tax. The

the instructions for Form 8109 and Pub.

discussed below.

penalty will not be imposed if the REIT

15 (Circular E), Employer’s Tax Guide.

can show that the failure to pay on time

Electronic Deposit Requirement

If the REIT owes tax when it files

was due to reasonable cause.

The REIT must make electronic deposits

Form 1120-REIT, do not include

Trust fund recovery penalty. This

of all depository taxes (such as

the payment with the tax return.

CAUTION

penalty may apply if certain excise,

employment tax, excise tax, and REIT

Instead, mail or deliver the payment with

income, social security, and Medicare

income tax) using the Electronic Federal

Form 8109 to an authorized depositary or

taxes that must be collected or withheld

Tax Payment System (EFTPS) in 2010 if:

use EFTPS, if applicable.

•

are not collected or withheld, or these

The total deposits of such taxes in

taxes are not paid. These taxes are

2008 were more than $200,000; or

Estimated Tax Payments

•

generally reported on:

The REIT was required to use EFTPS

•

Generally, the following rules apply to the

Form 720, Quarterly Federal Excise

in 2009.

REIT’s payments of estimated tax.

Tax Return;

•

If the REIT is required to use EFTPS

The REIT must make installment

Form 941, Employer’s QUARTERLY

and fails to do so, it may be subject to a

payments of estimated tax if it expects its

Federal Tax Return;

•

10% penalty. If the REIT is not required to

Form 943, Employer Annual Federal

total tax for the year (less applicable

use EFTPS, it may participate voluntarily.

credits) to be $500 or more.

Tax Return for Agricultural Employees;

•

To enroll in or receive more information

The installments are due by the 15th

Form 944, Employer’s ANNUAL

about EFTPS, call 1-800-555-4477. To

day of the 4th, 6th, 9th, and 12th months

Federal Tax Returns; or

•

enroll online, visit

of the tax year. If any date falls on a

Form 945, Annual Return of Withheld

Federal Income Tax.

Saturday, Sunday, or legal holiday, the

Depositing on time. For EFTPS

installment is due on the next regular

deposits to be made timely, the REIT

The trust fund recovery penalty may

business day.

must initiate the transaction at least 1

be imposed on all persons who are

•

Use Form 1120-W, Estimated Tax for

business day before the date the deposit

determined by the IRS to be responsible

Corporations, as a worksheet to compute

is due.

for collecting, accounting for, and paying

estimated tax.

over these taxes, and who acted willfully

Deposits With Form 8109

•

If the REIT does not use EFTPS, use

in not doing so. The penalty is equal to

If the REIT does not use EFTPS, deposit

the deposit coupons (Forms 8109) to

the full amount of the unpaid trust fund

REIT income tax payments (and

make deposits of estimated tax. See the

tax. See the Instructions for Form 720 or

estimated tax payments) with Form 8109,

instructions for Form 8109 for information

Publication 15 (Circular E), Employer’s

Federal Tax Deposit Coupon. If the REIT

on completing the coupon.

Tax Guide, for details, including the

•

does not have a preprinted Form 8109,

If the REIT overpaid its estimated tax, it

definition of responsible persons.

use Form 8109-B to make deposits. You

may be able to get a quick refund by filing

can get this form by calling

Failure to ascertain ownership. If the

Form 4466, Corporation Application for

REIT fails to comply with Regulations

1-800-829-4933 or by visiting an IRS

Quick Refund of Overpaid Estimated Tax.

taxpayer assistance center. Have the

section 1.857-8 for ascertaining

The overpayment must be at least 10% of

ownership and maintaining factual

REIT’s EIN ready when you call or visit.

the REIT’s expected income tax liability

ownership records for a tax year, it must

and at least $500.

Do not send deposits directly to an IRS

pay a $25,000 penalty ($50,000 for

office; otherwise, the REIT may have to

For more information, including

intentional disregard) upon notice and

pay a penalty. Mail or deliver the

penalties, see the Line 25. Estimated Tax

demand by the IRS. If the REIT can show

completed Form 8109 with the payment

Penalty instructions.

that the failure was due to reasonable

to an authorized depositary (a commercial

cause, the penalty may not be imposed.

bank or other financial institution

Interest and Penalties

For more information, see section 857(f).

authorized to accept federal tax deposits).

Interest. Interest is charged on taxes

Make checks or money orders payable to

Failures to satisfy certain REIT

paid late even if an extension of time to

the depositary. Records of the deposits

qualification provisions. If the REIT is

file is granted. Interest is also charged on

will be sent to the IRS.

required to pay the $50,000 penalty under

penalties imposed for failure to file,

section 856(g)(5)(C) for each failure to

If the REIT prefers, it can mail the

negligence, fraud, substantial valuation

satisfy a REIT qualification provision of

coupon and payment to:

misstatements, and substantial

sections 856 – 859 (other than section

Financial Agent, Federal Tax Deposit

understatements of tax from the due date

856(c)(2), 856(c)(3), or section 856(c)(4))

(including extensions) to the date of

Processing

due to reasonable cause and not willful

payment. The interest charge is figured at

neglect, see the instructions for Schedule

P.O. Box 970030

a rate determined under section 6621.

J, line 2f, on page 13.

St. Louis, MO 63197

Late filing of return. A REIT that does

Other penalties. Other penalties can be

Make the check or money order payable

not file its tax return by the due date,

imposed for negligence, substantial

to “Financial Agent.”

including extensions, may be penalized

understatement of tax, reportable

The financial agent cannot process

5% of the unpaid tax for each month or

transaction understatements, and fraud.

part of a month the return is late, up to a

foreign checks. If the corporation sends a

See sections 6662, 6662A, and 6663.

check written on a foreign bank to pay a

maximum of 25% of the unpaid tax. The

federal tax deposit, it may be charged a

minimum penalty for a return that is over

Accounting Methods

deposit penalty.

60 days late is the smaller of the tax due

Figure taxable income using the method

or $135. The penalty will not be imposed

To help ensure proper crediting, enter

of accounting regularly used in keeping

if the REIT can show that the failure to file

the REIT’s EIN, the tax period to which

the REIT’s books and records. In all

on time was due to reasonable cause.

the deposit applies, and “Form

cases, the method used must clearly

REITs that file late must attach a

1120-REIT” on the check or money order.

show taxable income.

statement explaining the reasonable

On the coupon, darken the “1120” box

cause.

under “Type of Tax” and the appropriate

Generally, permissible methods

“Quarter” box only under “Tax Period.”

Late payment of tax. A REIT that does

include:

•

See the Instructions for Form 8109 for

not pay the tax when due generally may

Cash,

•

details on how to complete the

be charged a penalty for the failure to pay

Accrual, or

-4-

Instructions For Form 1120-Reit - 2009 Page 4

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