Instructions For Form 1120-Pc - 2003 (Page 6 of 20) in pdf

Interest and Penalties

Address

Item E. Final Return, Name

Include the suite, room, or other unit

Change, Address Change,

Interest. Interest is charged on taxes

number after the street address. If the

paid late even if an extension of time to

or Amended Return

post office does not deliver mail to the

file is granted. Interest is also charged on

street address and the corporation has a

Indicate a final return, name change,

penalties imposed for failure to file,

P.O. box, show the box number instead.

address change, or amended return by

negligence, fraud, substantial valuation

checking the appropriate box.

misstatements, and substantial

Employer Identification

understatements of tax from the due date

Note. If a change of address occurs

(including extensions) to the date of

Number (EIN)

after the return is filed, use Form 8822,

payment. The interest charge is figured at

Change of Address, to notify the IRS of

Enter the corporation’s EIN. If the

a rate determined under section 6621.

the new address.

corporation does not have an EIN, it must

Penalty for late filing of return. A

apply for one. An EIN may be applied for:

Taxable Income

corporation that does not file its tax return

•

Online — Click on the EIN link at

by the due date, including extensions,

The

Line 1, Taxable income, and line 2,

may be penalized 5% of the unpaid tax

EIN is issued immediately once the

Taxable investment income. If the

for each month or part of a month the

application information is validated.

corporation is a small company as

return is late, up to a maximum of 25% of

•

By telephone at 1-800-829-4933 from

defined in section 831(b)(2) and elects

the unpaid tax. The minimum penalty for

7:30 a.m. to 5:30 p.m. in the corporation’s

under section 831(b)(2)(A)(ii) to be taxed

a return that is over 60 days late is the

local time zone.

on taxable investment income, complete

smaller of the tax due or $100. The

•

By mailing or faxing Form SS-4,

Schedule B (ignore Schedule A) and

penalty will not be imposed if the

Application for Employer Identification

enter the amount from Schedule B, line

corporation can show that the failure to

Number.

21, on line 2, page 1. All other

file on time was due to reasonable cause.

If the corporation has not received its

corporations should complete Schedule A

Corporations that file late must attach a

EIN by the time the return is due, write

(ignore Schedule B) and enter on line 1,

statement explaining the reasonable

“Applied for” in the space for the EIN. For

page 1, the amount from Schedule A, line

cause.

more details, see Pub. 583.

37.

Penalty for late payment of tax. A

Note: The online application process is

corporation that does not pay the tax

Tax Computation and

not yet available for corporations with

when due generally may have to pay a

addresses in foreign countries or Puerto

Payments

penalty of

of 1% of the unpaid tax for

Rico.

each month or part of a month the tax is

Line 3

not paid, up to a maximum of 25% of the

Item A. Section 953

unpaid tax. The penalty will not be

Members of a controlled group. A

imposed if the corporation can show that

Elections

member of a controlled group, as defined

the failure to pay on time was due to

in section 1563, must check the box on

Check the applicable box if the

reasonable cause.

line 3 and complete lines 3a and 3b.

corporation is a foreign corporation and

Trust fund recovery penalty. This

elects under:

Line 3a. Members of a controlled group

penalty may apply if certain excise,

1. Section 953(c)(3)(C) to treat its

are entitled to one $50,000, one $25,000,

income, social security, and Medicare

related person insurance income as

and one $9,925,000 taxable income

taxes that must be collected or withheld

effectively connected with the conduct of

bracket amount (in that order) on line 3a.

are not collected or withheld, or these

a trade or business in the United States

taxes are not paid. These taxes are

When a controlled group adopts or

generally reported on Forms 720, 941, or

later amends an apportionment plan,

2. Section 953(d) to be treated as a

each member must attach to its tax return

945 (see Other Forms and Statements

domestic corporation.

That May Be Required on page 2). The

a copy of its consent to this plan. The

Generally, a foreign corporation

copy (or an attached statement) must

trust fund recovery penalty may be

making either election must file its return

imposed on all persons determined by the

show the part of the amount in each

with the Internal Revenue Service Center,

IRS to have been responsible for

taxable income bracket apportioned to

Philadelphia, PA 19255. See Notice

that member. See Regulations section

collecting, accounting for, and paying

87-50, 1987-2 C.B. 357, and Rev. Proc.

over these taxes, and who acted willfully

1.1561-3(b) for other requirements and

2003-47, 2003-28 I.R.B. 55, for the

for the time and manner of making the

in not doing so. The penalty is equal to

procedural rules, election statement

the unpaid trust fund tax. See the

consent.

formats, and filing addresses for making

instructions for Form 720 or Pub. 15

Unequal apportionment plan.

the respective elections under section

(Circular E), Employer’s Tax Guide, for

Members of a controlled group may elect

953(c)(3)(C) or section 953(d).

details, including the definition of

an unequal apportionment plan and divide

responsible persons.

Note. Once either election is made, it will

the taxable income brackets as they want.

apply to the tax year for which made and

There is no need for consistency among

Other penalties. Other penalties can be

imposed for negligence, substantial

all subsequent tax years unless revoked

taxable income brackets. Any member

understatement of tax, and fraud. See

with the consent of the IRS. Also, any

may be entitled to all, some, or none of

sections 6662 and 6663.

loss of a foreign corporation electing to be

the taxable income bracket. However, the

treated as a domestic insurance company

total amount for all members cannot be

under section 953(d) will be treated as a

more than the total amount in each

dual-consolidated loss and may not be

taxable income bracket.

Specific Instructions

used to reduce the taxable income of any

Equal apportionment plan. If no

other member of the affiliated group for

apportionment plan is adopted, members

Period Covered

this tax year or any other tax year.

of a controlled group must divide the

Note. If a section 953(d) election is

Generally, file the 2003 return for

amount in each taxable income bracket

made, include the additional tax required

calendar year 2003. However, if an

equally among themselves. For example,

to be paid, on line 13, page 1. On the

insurance company joins in the filing of a

Controlled Group AB consists of

dotted line to the left of line 13, page 1,

consolidated return, it may adopt the tax

Corporation A and Corporation B. They

write “Section 953(d)” and the amount.

year of the common parent corporation

do not elect an apportionment plan.

Attach a schedule showing the

even if that year is not a calendar year.

Therefore, each corporation is entitled to:

•

computation. See section 953(d) for more

For a fiscal year return, fill in the tax year

$25,000 (one-half of $50,000) on line

details.

space at the top of the form.

3a(1),

-6-

Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2003 Page 6

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