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Who Must Sign

If the corporation is a former DISC or

the election. The common parent of a

former IC-DISC, it must file Form

consolidated group can make the election

The return must be signed and dated by:

1120-IC-DISC in addition to any other

for the group.

•

The president, vice president,

return required.

If the election is made as described

treasurer, assistant treasurer, chief

above, no election need be made by the

A former DISC is a corporation that

accounting officer or

•

transferee (or any controlling U.S.

was a DISC on or before December 31,

Any other corporate officer (such as tax

shareholder thereof).

1984, but failed to qualify as a DISC after

officer) authorized to sign.

December 31, 1984, or did not elect to be

Once made, the election is irrevocable.

If a return is filed on behalf of a

an IC-DISC after 1984; and at the

See section 362(e)(2)(C) and Notice

corporation by a receiver, trustee, or

beginning of the current tax year, it had

2005-70.

assignee, the fiduciary must sign the

undistributed income that was previously

return, instead of the corporate officer.

Other forms and statements. See the

taxed or it had accumulated DISC

Returns and forms signed by a receiver or

Instructions for Form 1120 and Pub. 542

income.

trustee in bankruptcy on behalf of a

for a list of other forms and statements a

A former IC-DISC is a corporation that

corporation must be accompanied by a

corporation may need to file in addition to

was an IC-DISC in an earlier year but did

copy of the order or instructions of the

the forms and statements discussed

not qualify as an IC-DISC for the current

court authorizing signing of the return or

throughout these instructions.

tax year; and at the beginning of the

form.

Assembling the Return

current tax year, it had undistributed

If an employee of the corporation

income that was previously taxed or

completes Form 1120-IC-DISC, the paid

To ensure that the corporation’s tax return

accumulated IC-DISC income. See

preparer’s space should remain blank.

is correctly processed, attach all

section 992 and related regulations.

Anyone who prepares Form

schedules and other forms after page 6,

A former DISC or former IC-DISC

1120-IC-DISC but does not charge the

Form 1120-IC-DISC, and in the following

need not complete lines 1 through 8 on

corporation should not complete that

order.

page 1 and the Schedules for figuring

section. Generally, anyone who is paid to

1. Schedule N (Form 1120).

taxable income, but must complete

prepare Form 1120-IC-DISC must sign it

2. Form 4136.

Schedules J, L, and M of Form

and fill in the “Paid Preparer Use Only”

3. Additional schedules in alphabetical

1120-IC-DISC and Schedule K (Form

area.

order.

1120-IC-DISC). Write “Former DISC” or

4. Additional forms in numerical order.

The paid preparer must complete the

“Former IC-DISC” across the top of the

required preparer information and:

return.

•

Complete every applicable entry space

Sign the return in the space provided

on Form 1120-IC-DISC. Do not enter

for the preparer’s signature.

When To File

•

“See Attached” or “Available Upon

Give a copy of the return to the

Request” instead of completing the entry

taxpayer.

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

spaces. If more space is needed on the

of the 9th month after its tax year ends.

Note. A paid preparer may sign original

forms or schedules, attach separate

No extensions are allowed. If the due

or amended returns by rubber stamp,

sheets using the same size and format as

date falls on a Saturday, Sunday, or a

mechanical device, or computer software

the printed forms. If there are supporting

legal holiday, the corporation may file on

program.

statements and attachments, arrange

the next business day.

them in the same order as the schedules

Other Forms and

Private delivery services. Corporations

or forms they support and attach them

may use certain private delivery services

last. Show the totals on the printed forms.

Statements That May Be

designated by the IRS to meet the “timely

Enter the corporation’s name and EIN on

Required

mailing as timely filing/paying” rule for tax

each supporting statement or attachment.

returns and payments. These private

delivery services include only the

Accounting Methods

Shareholders who are foreign persons.

following.

The corporation should inform

Figure taxable income using the method

•

DHL Express (DHL): DHL Same Day

shareholders who are nonresident alien

of accounting regularly used in keeping

Service.

individuals or foreign corporations, trusts,

the IC-DISC’s books and records. In all

•

Federal Express (FedEx): FedEx

or estates that if they have gains from

cases, the method used must clearly

Priority Overnight, FedEx Standard

disposal of stock in the IC-DISC, former

show taxable income. Permissible

Overnight, FedEx 2Day, FedEx

DISC, or former IC-DISC, or distributions

methods include cash, accrual, or any

International Priority, and FedEx

from accumulated IC-DISC income,

other method authorized by the Internal

International First.

including deemed distributions, they must

Revenue Code.

•

United Parcel Service (UPS): UPS Next

treat these amounts as effectively

Generally, the following rules apply.

Day Air, UPS Next Day Air Saver, UPS

connected with the conduct of a trade or

•

An IC-DISC must use the accrual

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

business conducted through a permanent

method of accounting if its average

Worldwide Express Plus, and UPS

establishment in the United States and

annual gross receipts exceed $5 million.

Worldwide Express.

derived from sources within the United

However, see Nonaccrual experience

States.

The private delivery service can tell

method for service providers on page 6.

•

you how to get written proof of the mailing

Election to reduce basis under section

Unless it is a qualifying taxpayer or a

date.

362(e)(2)(C). The transferor may make a

qualifying small business taxpayer, an

joint election under section 362(e)(2)(C)

IC-DISC must use the accrual method for

Private delivery services cannot

to limit the transferor’s basis in the stock

sales and purchases of inventory items.

deliver items to P.O. boxes. You

received instead of the transferee’s basis

See Cost of Goods Sold on page 5.

must use the U.S. Postal Service

•

CAUTION

in the transferred property. The transferor

A member of a controlled group may

to mail any item to an IRS P.O. box

can make the election by including the

not use an accounting method that would

address.

certification as provided in Notice

distort any group member’s income,

2005-70, 2005-41 I.R.B. 694 on or with its

including its own. For example, an

Where To File

tax return filed by the due date (including

IC-DISC acts as a commission agent for

File Form 1120-IC-DISC at the following

extensions) for the tax year in which the

property sales by a related corporation

address: Internal Revenue Service, 201

transaction occurred. If the transferor is a

that uses the accrual method and pays

W. Rivercenter Blvd., Covington, KY

controlled foreign corporation, its

the IC-DISC its commission more than 2

41019.

controlling U.S. shareholder(s) can make

months after the sale. In this case, the

-2-

Instructions for Form 1120-IC-DISC (Rev. 12-2011)

Instructions For Form 1120-Ic Disc - Interest Charge Domestic International Sales Corporation Return - 2011 Page 2

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