Instructions For Form 1120-Ic-Disc - 2007 (Page 2 of 16) in pdf

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IRS Tax Products CD/DVD. You can

It has only one class of stock, and its

Who Must File

order Pub. 1796, IRS Tax Products CD/

outstanding stock has a par or stated

The corporation must file Form

DVD, and obtain:

value of at least $2,500 on each day of

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

Current year forms, instructions, and

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

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

publications;

the last day to elect IC-DISC status for

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its election is in effect for the tax year.

Prior-year forms and instructions and

the year and on each later day).

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publications;

It maintains separate books and

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If the corporation is a former DISC or

Bonus: Historical Tax Products DVD —

records.

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former IC-DISC, it must file Form

Ships with the final release;

It is not a member of any controlled

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1120-IC-DISC in addition to any other

Tax Map: an electronic research tool

group of which a foreign sales corporation

return required.

and finding aid;

(FSC) is a member.

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Tax law frequently asked questions

Its tax year must conform to the tax

A former DISC is a corporation that

(FAQs);

year of the principal shareholder who has

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was a DISC on or before December 31,

Tax Topics from the IRS telephone

the highest percentage of voting power. If

1984, but failed to qualify as a DISC after

response system;

two or more shareholders have the

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December 31, 1984, or did not elect to be

Fill-in, print, and save features for most

highest percentage of voting power, the

an IC-DISC after 1984; and at the

tax forms;

IC-DISC must elect a tax year that

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beginning of the current tax year, it had

Internal Revenue Bulletins; and

conforms to that of any one of the

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undistributed income that was previously

Toll-free and email technical support.

principal shareholders. See section

taxed or it had accumulated DISC

The CD/DVD is released twice during

441(h) and its regulations for more

income.

the year. The first release will ship the

information.

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beginning of January and the final release

Its election to be treated as an IC-DISC

A former IC-DISC is a corporation that

will ship the beginning of March.

is in effect for the tax year.

was an IC-DISC in an earlier year but did

Buy the CD/DVD from the National

not qualify as an IC-DISC for the current

See Definitions on page 4 and section

Technical Information Service at

tax year; and at the beginning of the

992 and related regulations for details.

gov/cdorders for $35 (no handling fee) or

current tax year, it had undistributed

call 1-877-CDFORMS (1-877-233-6767)

income that was previously taxed or

Distribution to meet qualification

toll free to buy the CD/DVD for $35 (plus

accumulated IC-DISC income. See

requirements.

a $5 handling fee). Price is subject to

section 992 and related regulations.

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An IC-DISC that does not meet the

change.

gross receipts test or qualified export

A former DISC or former IC-DISC

By phone and in person. You can

asset test during the tax year will still be

need not complete lines 1 through 8 on

order forms and publications by calling

considered to have met them if, after the

page 1 and the Schedules for figuring

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

tax year ends, the IC-DISC makes a pro

taxable income, but must complete

can also get most forms and publications

rata property distribution to its

Schedules J, L, and M of Form

at your local IRS office.

shareholders and specifies at the time

1120-IC-DISC and Schedule K (Form

that this is a distribution to meet the

1120-IC-DISC). Write “Former DISC” or

qualification requirements.

“Former IC-DISC” across the top of the

General Instructions

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If the IC-DISC did not meet the gross

return.

receipts test, the distribution equals the

Purpose of Form

part of its taxable income attributable to

When To File

gross receipts that are not qualified export

Form 1120-IC-DISC is an information

gross receipts.

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

return filed by interest charge domestic

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of the 9th month after its tax year ends.

If it did not meet the qualified export

international sales corporations

No extensions are allowed. If the due

asset test, the distribution equals the fair

(IC-DISCs), former DISCs, and former

date falls on a Saturday, Sunday, or a

market value of the assets that are not

IC-DISCs.

legal holiday, the corporation may file on

qualified export assets on the last day of

What Is an IC-DISC?

the next business day.

the tax year.

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An IC-DISC is a domestic corporation that

If the IC-DISC did not meet either test,

Private delivery services. Corporations

has elected to be an IC-DISC and its

the distribution equals the sum of both

may use certain private delivery services

election is still in effect. The IC-DISC

amounts.

designated by the IRS to meet the “timely

election is made by filing Form 4876-A,

mailing as timely filing/paying” rule for tax

Regulations section 1.992-3 explains

Election To Be Treated as an Interest

returns and payments. These private

how to figure the distribution.

Charge DISC.

delivery services include only the

Generally, an IC-DISC is not taxed on

Interest on late distribution. If the

following.

its income. Shareholders of an IC-DISC

IC-DISC makes a distribution after Form

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are taxed on its income when the income

DHL Express (DHL): DHL Same Day

1120-IC-DISC is due, interest must be

is actually (or deemed) distributed. In

Service, DHL Next Day 10:30 am, DHL

paid to the United States Treasury. The

addition, section 995(f) imposes an

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

interest charge is 4

% of the distribution

interest charge on shareholders for their

pm, and DHL 2nd Day Service.

times the number of tax years that begin

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share of DISC-related deferred tax

Federal Express (FedEx): FedEx

after the tax year to which the distribution

liability. See Form 8404, Interest Charge

Priority Overnight, FedEx Standard

relates until the date the IC-DISC made

on DISC-Related Deferred Tax Liability,

Overnight, FedEx 2Day, FedEx

the distribution.

for details.

International Priority, and FedEx

To be an IC-DISC, a corporation must

If the IC-DISC must pay this interest,

International First.

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be organized under the laws of a state or

send the payment to the Internal Revenue

United Parcel Service (UPS): UPS Next

the District of Columbia and meet the

Service Center where you filed Form

Day Air, UPS Next Day Air Saver, UPS

following tests.

1120-IC-DISC within 30 days of making

2nd Day Air, UPS 2nd Day Air A.M., UPS

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At least 95% of its gross receipts during

the distribution. On the payment, write the

Worldwide Express Plus, and UPS

the tax year are qualified export receipts.

IC-DISC’s name, address, and employer

Worldwide Express.

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At the end of the tax year, the adjusted

identification number; the tax year; and a

basis of its qualified export assets is at

statement that the payment represents

The private delivery service can tell

least 95% of the sum of the adjusted

the interest charge under Regulations

you how to get written proof of the mailing

basis of all of its assets.

section 1.992-3(c)(4).

date.

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Instructions for Form 1120-IC-DISC

Instructions For Form 1120-Ic-Disc - 2007 Page 2

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