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Complete a second Form 2220 as a worksheet using the

Part II—Figuring the Underpayment

November 15, 2001, due date.

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Line 4. Generally, enter the tax from line 31, Form 1120; line

Write the amount to be waived (the difference between the

27, Form 1120-A; or the applicable line for other income tax

penalty figured with and without regard to this relief) in

returns. However, if that amount includes any tax attributable to

parentheses on the dotted line next to line 36. Subtract that

a sale described in section 338(a)(1), do not include that tax on

amount from the total penalty figured without regard to this relief

line 4. Instead, write “Sec. 338 gain” and show the amount of

and enter that result on line 36. Do not attach the worksheet

tax in brackets on the dotted line next to line 4.

Form 2220 to the corporation’s return.

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Attach a statement to the corporation’s return requesting

Filers of Forms 990-PF, 990-T, 1120-F, 1120-L, 1120-ND,

relief as an indirectly affected taxpayer. Explain your situation

1120-PC, 1120-REIT, 1120-RIC, 1120S, and 1120-SF. See the

and indicate the due date of the payment that you are

instructions for the appropriate tax return for the definition of tax

requesting be extended to November 15, 2001. Include the

for estimated tax purposes.

amount of the penalty figured without regard to the relief, the

Special instructions for calendar year corporations who

amount to be waived, and any remaining penalty.

have a suspended research credit. Write “Suspended

Research Credit” at the top of Form 2220. Complete lines 4

through 10 (and Schedule A, if applicable) of Form 2220 as

Specific Instructions

indicated, using the amounts from the corporation’s tax return

(i.e., not taking into account the suspended research credit

allowed for the current year). Then, complete only lines 4

through 10 (and Schedule A, if applicable) of a second Form

Part I—Reasons for Filing

2220 and write “worksheet” at the top of each page. Reduce the

Lines 1 and 2. Annualized income installment method and/

tax on line 4 of the second Form 2220 by the suspended

or adjusted seasonal installment method. If the

research credit allowed for the current year. That amount is the

corporation’s income varied during the year because, for

smaller of (a) Form 6765, line 43, or (b) Form 6765, line 56, or

example, it operated its business on a seasonal basis, it may be

Form 3800, line 18c, whichever applies. If you are completing

able to lower or eliminate the amount of one or more required

Schedule A, complete lines 8 and 32 for the second Form 2220

installments by using the annualized income installment method

as if the credit were not suspended. Next, on the first Form

and/or the adjusted seasonal installment method.

2220, include on line 11, column (d), as a deemed payment

made on October 1, 2001, the excess of (a) the sum of line 10,

Example. A ski shop, which receives most of its income

columns (a), (b), and (c) of the first Form 2220 over (b) the sum

during the winter months, may benefit from using one or both of

of those amounts on the second Form 2220. Also, on the first

these methods to figure its required installments. The

Form 2220, include on line 11, column (d), as a deemed

annualized income installment or adjusted seasonal installment

payment made on December 15, 2001, the excess of (a) the

may be less than the required installment under the regular

sum of line 10, columns (a), (b), (c), and (d) of the first Form

method for one or more due dates. Using one or both of these

2220 over (b) the sum of those amounts on the second Form

methods may reduce or eliminate the penalty for those due

2220 plus the October 1, 2001, deemed payment. Complete the

dates.

rest of the first Form 2220 and attach both Forms 2220 to the

corporation’s tax return.

Use Schedule A on pages 3 and 4 of Form 2220 to figure

one or more required installments. If Schedule A is used for any

Example. The corporation has $10,000 on Form 2220,

payment due date, it must be used for all payment due dates.

line 8, and $8,000 on line 8 of the second Form 2220. The

To arrive at the amount of each required installment, Schedule

corporation does not check box 1, 2, or 3. The corporation

A automatically selects the smallest of:

enters $2,500 (1/4 of $10,000) in each column on line 10 of the

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The annualized income installment,

first Form 2220 and $2,000 in each column of line 10 of the

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The adjusted seasonal installment (if applicable), or

second Form 2220. The corporation includes on the first Form

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The regular installment under section 6655(d) (increased by

2220, line 11, column (d), deemed payments of $1,500 ((3 x

any reduction recaptured under section 6655(e)(1)(B)).

$2,500) - (3 x $2,000)) on October 1, 2001, and $500 ($10,000

Follow the steps below to determine which parts of the form

- $8,000 - $1,500) on December 15, 2001.

have to be completed.

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Special instructions for fiscal year corporations with a

If the corporation is using only the annualized income

required installment due before October 1, 2001, who have

installment method, check the box on line 1 of Part I and

a suspended research credit. Follow the instructions above,

complete Parts I and III of Schedule A.

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with the following modifications.

If the corporation is using only the adjusted seasonal

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installment method, check the box on line 2 of Part I and

The corporation has a deemed payment on October 1, 2001,

complete Parts II and III of Schedule A.

equal to the excess of the sum of the amounts on line 10 of the

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If the corporation is using both methods, check the boxes on

first Form 2220 for columns whose due date is before October

lines 1 and 2 of Part I and complete all three parts of Schedule

2, 2001, over the sum of those amounts on the second Form

2220.

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For each installment due date after October 1, 2001, the

Line 3. Large corporations. A large corporation is a

corporation has a deemed payment on that due date equal to

corporation (other than an S corporation) that had, or whose

the excess of (a) the sum of the amounts on line 10 of the first

predecessor had, taxable income (defined below) of $1 million

Form 2220 in that column and all preceding columns over (b)

or more for any of the 3 tax years immediately preceding the

the sum of those amounts on the second Form 2220 plus all

current tax year. A large corporation includes a “large

prior deemed payments.

organization” as defined in the instructions for Form 990-W.

Take the deemed payment(s) into account as if they were

actual payments.

Taxable income, for this purpose, is modified to exclude

net operating loss or capital loss carrybacks or carryovers.

Line 5c. Enter the amount from line 32g, Form 1120; line 28g,

Members of a controlled group, as defined in section 1563,

Form 1120-A; or the applicable line for other income tax

must divide the $1 million amount among themselves under

returns.

rules similar to those in section 1561.

Line 7. All filers (other than S corporations below). Figure

If the corporation is a large corporation, check the box on

the corporation’s 2000 tax the same way the amount on line 6

line 3 and, if applicable, check the box(es) on line 1 and/or line

of this form was determined using the taxes and credits from its

2. Also, if applicable, complete Parts I, II, and III of Schedule A,

2000 tax return. But skip line 7 and enter the amount from

as discussed above.

line 6 on line 8 if:

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Instructions For Form 2220 - Underpayment Of Estimated Tax By Corporations - Internal Revenue Service - 2001 Page 2

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