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consent. For more information on change

estimated tax payments) with Form 8109,

at least 10% of expected income tax

of tax year, see Form 1128, Regulations

Federal Tax Deposit Coupon. If you do

liability and be at least $500. File Form

section 1.442-1, and Pub. 538.

not have a preprinted Form 8109, use

4466 after the end of the cooperative’s

Form 8109-B to make deposits. You can

tax year, and no later than the 15th day of

Rounding Off to Whole

get this form by calling 1-800-829-4933.

the third month after the end of the tax

Be sure to have your EIN ready when you

year. Form 4466 must be filed before the

Dollars

call.

cooperative files its tax return.

The cooperative can round off cents to

Do not send deposits directly to an IRS

whole dollars on its return and schedules.

Interest and Penalties

office; otherwise, the cooperative may

If the cooperative does round to whole

have to pay a penalty. Mail or deliver the

dollars, it must round all amounts. To

Interest. Interest is charged on taxes

completed Form 8109 with the payment

round, drop amounts under 50 cents and

paid late even if an extension of time to

to an authorized depositary (a commercial

increase amounts from 50 to 99 cents to

file is granted. Interest is also charged on

bank or other financial institution

the next dollar (for example, $1.39

penalties imposed for failure to file,

authorized to accept federal tax deposits).

becomes $1 and $2.50 becomes $3.)

negligence, fraud, substantial valuation

Make checks or money orders payable to

misstatements, and substantial

If two or more amounts must be added

the depositary.

understatements of tax from the due date

to figure the amount to enter on a line,

(including extensions) to the date of

If the cooperative prefers, it may mail

include cents when adding the amounts

payment. The interest charge is figured at

the coupon and payment to: Financial

and round off only the total.

a rate determined under section 6621.

Agent, Federal Tax Deposit Processing,

Recordkeeping

P.O. Box 970030, St. Louis, MO 63197.

Penalty for late filing of return. A

Make the check or money order payable

Keep the cooperative’s records for as

cooperative that does not file its tax return

to “Financial Agent.”

long as they may be needed for the

by the due date, including extensions,

administration of any provision of the

To help ensure proper crediting, enter

may be penalized 5% of the unpaid tax

Internal Revenue Code. Usually, records

the cooperative’s EIN, the tax period to

for each month or part of a month the

that support an item of income, deduction,

which the deposit applies, and “Form

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

or credit on the return must be kept for 3

990-C” on the check or money order. Be

the unpaid tax. The minimum penalty for

years from the date the return is due or

sure to darken the “990-C” box under

a return that is over 60 days late is the

filed, whichever is later. Keep records that

“Type of Tax” and the appropriate

smaller of the tax due or $100. The

verify the cooperative’s basis in property

“Quarter” box under “Tax Period” on the

penalty will not be imposed if the

for as long as they are needed to figure

coupon. Records of these deposits will be

cooperative can show that the failure to

the basis of the original or replacement

sent to the IRS. For more information, see

file on time was due to reasonable cause.

property.

“Marking the Proper Tax Period” in the

Cooperatives that file late should attach a

instructions for Form 8109.

statement explaining the reasonable

The cooperative should also keep

cause.

copies of all returns. They help in

If the cooperative owes tax when it

preparing future and amended returns.

files Form 990-C, do not include

Penalty for late payment of tax. A

the payment with the tax return.

cooperative that does not pay the tax

CAUTION

Depository Methods of Tax

Instead, mail or deliver the payment with

when due generally may be penalized

Payment

Form 8109 to an authorized depositary or

of 1% of the unpaid tax for each month or

use EFTPS, if applicable.

part of a month the tax is not paid, up to a

The cooperative must pay the tax due in

maximum of 25% of the unpaid tax. The

full no later than the 15th day of the 9th

Estimated Tax Payments

penalty will not be imposed if the

month after the end of the tax year. The

cooperative can show that the failure to

two methods of depositing cooperative

Generally, the following rules apply to the

pay on time was due to reasonable

income taxes are discussed below.

cooperative’s payments of estimated tax.

cause.

•

The cooperative must make installment

Electronic Deposit Requirement. The

payments of estimated tax if it expects its

cooperative must make electronic

Trust fund recovery penalty. This

total tax for the year (less applicable

deposits of all depository taxes (such as

penalty may apply if certain excise,

credits) to be $500 or more.

employment tax, excise tax, and

income, social security, and Medicare

•

The installments are due by the 15th

corporate income tax) using the

taxes that must be collected or withheld

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

Electronic Federal Tax Payment System

are not collected or withheld, or these

of the tax year. If any date falls on a

(EFTPS) in 2005 if:

taxes are not paid. These taxes are

•

Saturday, Sunday, or legal holiday, the

The total deposits of such taxes in

generally reported on Forms 720, 941,

installment is due on the next regular

2003 were more than $200,000 or

943, or 945 (see Other Forms and

•

business day.

The cooperative was required to use

Statements That May Be Required, later).

•

Use Form 1120-W, Estimated Tax for

EFTPS in 2004.

The trust fund recovery penalty may be

Corporations, as a worksheet to compute

imposed on all persons who are

If the cooperative is required to use

estimated tax.

determined by the IRS to have been

EFTPS and fails to do so, it may be

•

If the cooperative does not use EFTPS,

responsible for collecting, accounting for,

subject to a 10% penalty. If the

use the deposit coupons (Form 8109) to

and paying over these taxes, and who

cooperative is not required to use EFTPS,

make deposits of estimated tax.

acted willfully in not doing so. The penalty

it can participate voluntarily. To enroll in

is equal to the unpaid trust fund tax. See

or get more information about EFTPS,

For more information on estimated tax

the instructions for Form 720, Pub. 15

call 1-800-555-4477 or 1-800-945-8400.

payments, including penalties that apply if

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

To enroll online, visit

the cooperative fails to make required

Pub. 51 (Circular A), Agricultural

payments, see the instructions for line 33

Depositing on time. For EFTPS

Employer’s Tax Guide, for details,

on page 13.

deposits to be made timely, the

including the definition of responsible

cooperative must initiate the transaction

Overpaid estimated tax. If the

persons.

at least 1 business day before the date

cooperative overpaid estimated tax, it

the deposit is due.

may be able to get a quick refund by filing

Other penalties. Other penalties can be

Deposit with Form 8109. If the

Form 4466, Corporation Application for

imposed for negligence, substantial

cooperative does not use EFTPS, deposit

Quick Refund of Overpayment of

understatement of tax, and fraud. See

cooperative income tax payments (and

Estimated Tax. The overpayment must be

sections 6662 and 6663.

-4-

Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - Internal Revenue Service - 2004 Page 4

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