Instructions For Form 1120-Ic-Disc - 2004 (Page 2 of 15) in pdf

of at least $2,500 on each day of the tax

interest charge under Regulations section

How To Get Forms and

year (or, for a new corporation, on the last

1.992-3(c)(4).

Publications

day to elect IC-DISC status for the year and

Who Must File

on each later day).

•

Personal computer. You can access the

It maintains separate books and records.

The corporation must file Form

•

IRS website 24 hours a day, 7 days a week,

It is not a member of any controlled group

1120-IC-DISC if it elected, by filing Form

at to:

of which a foreign sales corporation (FSC) is

•

4876-A, to be treated as an IC-DISC and its

Order IRS products online.

a member.

•

election is in effect for the tax year.

•

Download forms, instructions, and

Its tax year must conform to the tax year

publications.

If the corporation is a former DISC or

of the principal shareholder who has the

•

See answers to frequently asked tax

former IC-DISC, it must file Form

highest percentage of voting power. If two or

questions.

1120-IC-DISC in addition to any other return

more shareholders have the highest

•

Search publications online by topic or

required.

percentage of voting power, the IC-DISC

keyword.

must elect a tax year that conforms to that of

A former DISC is a corporation that was

•

Send us comments or request help by

any one of the principal shareholders. See

a DISC on or before December 31, 1984,

email.

section 441(h) and its regulations for more

•

but failed to qualify as a DISC after

information.

December 31, 1984, or did not elect to be

•

news by email.

Its election to be treated as an IC-DISC is

an IC-DISC after 1984; and at the beginning

in effect for the tax year.

CD-ROM. Order Pub. 1796, Federal Tax

of the current tax year, it had undistributed

Products on CD-ROM, and get:

income that was previously taxed or it had

See Definitions on page 4 and section

•

Current year forms, instructions, and

accumulated DISC income.

992 and related regulations for details.

publications.

•

Distribution to meet qualification

A former IC-DISC is a corporation that

Prior year forms, instructions, and

requirements.

was an IC-DISC in an earlier year but did

publications.

•

An IC-DISC that does not meet the gross

not qualify as an IC-DISC for the current tax

Frequently requested tax forms that can

receipts test or qualified export asset test

year; and at the beginning of the current tax

be filled in electronically, printed out for

during the tax year will still be considered to

year, it had undistributed income that was

submission, and saved for recordkeeping.

•

have met them if, after the tax year ends,

previously taxed or accumulated IC-DISC

The Internal Revenue Bulletin.

the IC-DISC makes a pro rata property

income. See section 992 and related

Buy the CD-ROM on the Internet at

distribution to its shareholders and specifies

regulations.

/cdorders from the National

at the time that this is a distribution to meet

A former DISC or former IC-DISC need

Technical Information Service (NTIS) for

the qualification requirements.

•

not complete lines 1 through 8 on page 1

$22 (no handling fee) or call

If the IC-DISC did not meet the gross

and the Schedules for figuring taxable

1-877-CDFORMS (1-877-233-6767) toll free

receipts test, the distribution equals the part

income, but must complete Schedules J, L,

to buy the CD-ROM for $22 (plus a $5

of its taxable income attributable to gross

and M of Form 1120-IC-DISC and Schedule

handling fee).

receipts that are not qualified export gross

K (Form 1120-IC-DISC). Write “Former

receipts.

By phone and in person. You can order

•

DISC” or “Former IC-DISC” across the top of

If it did not meet the qualified export asset

forms and publications by calling

the return.

test, the distribution equals the fair market

1-800-TAX-FORM (1-800-829-3676). You

value of the assets that are not qualified

can also get most forms and publications at

When To File

export assets on the last day of the tax year.

your local IRS office.

•

If the IC-DISC did not meet either test, the

File Form 1120-IC-DISC by the 15th day of

distribution equals the sum of both amounts.

the 9th month after its tax year ends. No

extensions are allowed. If the due date falls

General Instructions

Regulations section 1.992-3 explains

on a Saturday, Sunday, or a legal holiday,

how to figure the distribution.

the corporation may file on the next

Interest on late distribution. If the

Purpose of Form

business day.

IC-DISC makes a distribution after Form

Private delivery services. Corporations

Form 1120-IC-DISC is an information return

1120-IC-DISC is due, interest must be paid

can use certain private delivery services

filed by interest charge domestic

to the United States Treasury. The interest

designated by the IRS to meet the “timely

charge is 4

% of the distribution times the

international sales corporations (IC-DISCs),

mailing as timely filing/paying” rule for tax

former DISCs, and former IC-DISCs.

number of tax years that begin after the tax

returns and payments. These private

year to which the distribution relates until the

What Is an IC-DISC?

delivery services include only the following:

date the IC-DISC made the distribution.

•

An IC-DISC is a domestic corporation that

If the IC-DISC must pay this interest,

DHL Express (DHL): DHL Same Day

has elected to be an IC-DISC and its

send the payment to the Internal Revenue

Service, DHL Next Day 10:30 am, DHL Next

election is still in effect. The IC-DISC

Service Center where you filed Form

Day 12:00 pm, DHL Next Day 3:00 pm, and

election is made by filing Form 4876-A,

1120-IC-DISC within 30 days of making the

DHL 2nd Day Service.

•

Election To Be Treated as an Interest

distribution. On the payment, write the

Federal Express (FedEx): FedEx Priority

Charge DISC.

IC-DISC’s name, address, and employer

Overnight, FedEx Standard Overnight,

identification number; the tax year; and a

FedEx 2Day, FedEx International Priority,

Generally, an IC-DISC is not taxed on its

statement that the payment represents the

and FedEx International First.

income. Shareholders of an IC-DISC are

taxed on its income when the income is

actually (or deemed) distributed. In addition,

section 995(f) imposes an interest charge on

Where To File

shareholders for their share of DISC-related

deferred tax liability. See Form 8404,

Interest Charge on DISC-Related Deferred

File the IC-DISC’s return at the applicable IRS address listed below.

Tax Liability, for details.

To be an IC-DISC, a corporation must be

If the corporation’s principal business,

Use the following Internal Revenue Service

organized under the laws of a state or the

office, or agency is located in:

Center address:

District of Columbia and meet the following

The United States (including Alaska and

tests.

•

Hawaii)

Cincinnati, OH 45999-0012

At least 95% of its gross receipts during

the tax year are qualified export receipts.

•

A foreign country or U.S. possession

Philadelphia, PA 19255-0012

At the end of the tax year, the adjusted

basis of its qualified export assets is at least

A group of corporations with members located in more than one service center area will

95% of the sum of the adjusted basis of all

often keep all the books and records at the principal office of the managing corporation. In

of its assets.

•

this case, the tax returns of the corporations may be filed with the service center for the area

It has only one class of stock, and its

outstanding stock has a par or stated value

in which the principal office of the managing corporation is located.

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Instructions for Form 1120-IC-DISC

Instructions For Form 1120-Ic-Disc - 2004 Page 2

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