Instructions For Form 1120-Fsc - 2007 (Page 6 of 13) in pdf

authorized depositary (a commercial bank or

(including extensions) to the date of

effective for tax years beginning after

other financial institution authorized to

payment. The interest charge is figured at a

December 31, 2007.

accept Federal tax deposits). Make checks

rate determined under section 6621.

Name. Print or type the FSC’s true name

or money orders payable to the depositary.

Late filing of return. A FSC that does not

(as set forth in the charter or other legal

If the FSC prefers, it may mail the

file its tax return by the due date, including

document creating it).

coupon and payment to: Financial Agent,

extensions, may be penalized 5% of the

Address. Enter the U.S. address where

Federal Tax Deposit Processing, P.O. Box

unpaid tax for each month or part of a month

the FSC maintains the records required

970030, St. Louis, MO 63197. Make the

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

under section 6001. Include the suite, room,

check or money order payable to

of the unpaid tax. The minimum penalty for

or other unit number after the street

“Financial Agent.”

a return that is over 60 days late is the

address. If the post office does not deliver

smaller of the tax due or $100. The penalty

To help ensure proper crediting, write the

mail to the street address and the FSC has

will not be imposed if the FSC can show that

FSC’s EIN, the tax period to which the

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

the failure to file on time was due to

deposit applies, and “Form 1120-FSC” on

If the FSC receives its mail in care of a

reasonable cause. FSCs that file late should

the check or money order. Darken the

third party (such as an accountant or an

attach a statement explaining the

“1120” box under “Type of Tax” and the

attorney), enter on the street address line

reasonable cause.

appropriate “Quarter” box under “Tax

“C/O” followed by the third party’s name and

Period” on the coupon. Records of these

Late payment of tax. A FSC that does not

street address or P.O. box.

deposits will be sent to the IRS.

pay the tax when due generally may be

Item A. Foreign country or U.S.

penalized

of 1% of the unpaid tax for

For more information on deposits, see

possession of incorporation. See

each month or part of a month the tax is not

the instructions in the coupon booklet (Form

Definition of a Foreign Sales Corporation

paid, up to a maximum of 25% of the unpaid

8109) and Pub. 583, Starting a Business

(FSC) on page 2.

tax. The penalty will not be imposed if the

and Keeping Records.

Item E. Total assets. Enter the FSC’s total

FSC can show that the failure to pay on time

assets (as determined by the accounting

was due to reasonable cause.

If the FSC maintains an office or

method regularly used in keeping the FSC’s

Trust fund recovery penalty. This penalty

place of business in the United

books and records) at the end of the tax

may apply if certain income, social security,

States and it owes tax when it files

year from page 6, Schedule L, column (d),

CAUTION

and Medicare taxes that must be collected

Form 1120-FSC, do not include the payment

line 15. If there are no assets at the end of

or withheld are not collected or withheld, or

with the tax return. Instead, mail or deliver

the tax year, enter -0-.

these taxes are not paid. These taxes are

the payment with Form 8109 to an

Item F. Final return, name change,

generally reported on Form 941, Employer’s

authorized depositary, or use EFTPS, if

address change, or amended return.

QUARTERLY Federal Tax Return, or Form

•

applicable.

If this is the FSC’s final return and it will

945, Annual Return of Withheld Federal

no longer exist, check the “Final return” box.

Income Tax.

Estimated Tax Payments

•

If the FSC changed its name since it last

The trust fund recovery penalty may be

filed a return, check the box for “Name

Generally, the following rules apply to the

imposed on all persons who are determined

change.” Generally, a FSC also must have

FSC’s payments of estimated tax:

by the IRS to have been responsible for

amended its articles of incorporation and

•

The FSC must make installment

collecting, accounting for, and paying over

filed the amendment with the jurisdiction in

payments of estimated tax if it expects its

these taxes, and who acted willfully in not

which it was incorporated.

total tax for the year (less applicable credits)

doing so. The penalty is equal to the unpaid

•

If the FSC has changed its address since

to be $500 or more.

trust fund tax. See Pub. 15 (Circular E),

it last filed a return (including a change to an

•

The installments are due by the 15th day

Employer’s Tax Guide, for details, including

“in care of” address), check the box for

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

the definition of responsible persons.

“Address change.”

tax year. If any date falls on a Saturday,

Other penalties. Other penalties may be

Note. If a change of address occurs after

Sunday, or legal holiday, the installment is

imposed for negligence, substantial

the return is filed, use Form 8822, Change

due on the next regular business day.

understatement of tax, and fraud. See

•

of Address, to notify the IRS of the new

Use Form 1120-W, Estimated Tax for

sections 6662, 6662A, and 6663.

address.

Corporations, as a worksheet to compute

•

A FSC may also be subject to a penalty

If the FSC is amending its return, check

estimated tax.

•

(under section 6686) of:

the box for “Amended return.”

If the FSC maintains an office or place of

•

$100 for each failure to supply

business in the United States and it does

FSC Information

information, up to $25,000 during the

not use EFTPS, use the deposit coupons

calendar year.

(Forms 8109) to make deposits of estimated

Line 1. Principal shareholder. Complete

•

$1,000 for not filing a return.

tax.

lines 1a through 1h for the shareholder

•

If the FSC does not maintain an office or

These penalties will not apply if the FSC

(individual, corporation, partnership, trust, or

place of business in the United States, it

can show that the failure to furnish the

estate) that was the principal shareholder at

must pay the estimated tax due directly to

required information was due to reasonable

the beginning of the FSC’s tax year. See the

the IRS

cause.

Note on page 5 under Accounting Period.

•

If the FSC overpaid estimated tax, it may

Foreign address. Enter the information

be able to get a quick refund by filing Form

in the following order: city, province or state,

4466, Corporation Application for Quick

and country. Follow the country’s practice

Specific Instructions

Refund of Overpayment of Estimated Tax.

for entering the postal code. Do not

For more information on estimated tax

abbreviate the country name.

payments, including penalties that apply if

Period covered. File the 2007 return for

Line 2. Parent-subsidiary controlled

the FSC fails to make required payments,

calendar year 2007 and fiscal years that

group. If the FSC is a subsidiary in a

see Line 3, Estimated tax penalty,

begin in 2007 and end in 2008. For a fiscal

parent-subsidiary controlled group and the

on page 7.

year return, fill in the tax year space at the

principal shareholder is not the common

top of the form.

parent of the group, complete lines 2a

Interest and Penalties

Note. The 2007 Form 1120-FSC may also

through 2g for the common parent. Enter the

be used if:

consolidated total assets on line 2d for a

Interest. Interest is charged on taxes paid

•

The FSC has a tax year of less than 12

group that files a consolidated return;

late even if an extension of time to file is

otherwise, enter only the common parent’s

months that begins and ends in 2008 and

granted. Interest is also charged on

•

The 2008 Form 1120-FSC is not available

total assets.

penalties imposed for failure to file,

at the time the FSC is required to file its

negligence, fraud, substantial valuation

Note. Check the “Yes” box on line 2 if the

return.

misstatements, gross valuation

FSC is a subsidiary in a parent-subsidiary

misstatements, substantial understatements

The FSC must show its 2008 tax year on

controlled group. This applies even if the

of tax, and reportable transaction

the 2007 Form 1120-FSC and take into

FSC is a subsidiary member of one group

understatements from the due date

account any tax law changes that are

and the parent corporation of another.

-6-

Instructions For Form 1120-Fsc - 2007 Page 6

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