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Section 40-18-80.1 provides for underpayment of estimated tax penalty in an

Line 4. Enter the amount of state and local income taxes paid. Enter the

amount determined by applying the underpayment rate established under 26

amount of any state and local income tax refunds as a negative amount.

U.S.C. §6621.

Line 5. Enter the net amount of income or (loss) from rental real estate

activities.

Amount of required installments shall be 25 percent of the required annual pay-

ment. Required annual payment generally means the lesser of a) 100 percent of

Line 6. Enter the net amount of income or (loss) from other rental activities.

the tax shown on the return for taxable year, or b) 100 percent of the tax shown on

Line 7. Enter the net amount of Internal Revenue Code Section 1231 gain or

the return of the corporation for the preceding taxable year.

(loss), but do not include any amount for casualty losses.

Line 8. Enter as a negative amount the amount of Internal Revenue Code

FORM 20-E. Payment Voucher and Extension Request. Form 20-E may be

Section 179 expense but only for property placed in service prior to 1990.

used to request an extension of up to six (6) months for filing a return. It may also

be used as a payment voucher. If estimated payments do not equal or exceed the

Line 9. Enter the total amount of other items required to reconcile the federal

amount of tax due for the period, the balance of the corporation’s tax liability is due

ordinary income (loss) to income on an Alabama basis. Attach a schedule clearly

on or before the original due date of the return. Form 20-E should be submitted

explaining the nature and amounts of the reconciling items.

with the payment if the return is to be filed under extension.

Line 10. Net Reconciling Items. Enter the sum of lines 2 through 9.

Line 11. Net Alabama Nonseparately Stated Income or (Loss). Enter the sum

OTHER PENALTIES.

of line 1 and line 10. This amount is carried to line 1, Schedule E.

Civil Liability. Any person failing to file a return as required by Alabama law or

Separately Stated Items (Related to Business Income)

filing a willfully false or fraudulent return will be assessed by the Alabama Depart-

Line 12. Contributions. Enter as a negative amount the amount of contribu-

ment of Revenue on the basis of the best information obtainable by the Depart-

tions. Enter the same amount on line 2, Schedule K, in the Federal Amount column.

ment with respect to the income of such taxpayer. In the case of failure or neglect

Line 13. Oil and Gas Depletion. Enter as a negative amount the amount of oil

to file any list or return, the Department shall add to the amount of tax due a

and gas depletion. Enter the same amount on line 3, Schedule K, in the Federal

penalty of 10% of such tax or $50, whichever is greater. In the case of a willfully

Amount column. The amount of oil and gas depletion claimed must be computed

false or fraudulent return having been filed, the Department shall add a penalty of

in accordance with Section 40-18-16(b), which states: “…(2) Amount. In the case

not more than 50% of such tax. In addition, interest shall be added on any addi-

of oil and gas wells, the allowance for depletion shall be 12 percent of the gross in-

tional tax due.

come from the property during the taxable year, excluding from such gross income

If any person is delinquent in payment of income tax for more than 30 days

an amount equal to any rents or royalties paid or incurred by the taxpayer in re-

after the due date for filing the return, the Department shall add a penalty of 1% per

spect to the property. Such amounts shall not exceed 50 percent of the net income

month or fraction thereof, up to 25%, on any such tax which remains unpaid.

of the taxpayer, computed without allowance for depletion, from the property, ex-

Criminal Liability. §40-29-112, Code of Alabama 1975, as amended, pro-

cept that in no case shall the depletion allowance be less than the amount allow-

vides for a more severe penalty for not filing tax returns. Any person required to file

able under federal income tax law. In the case of leases the deductions allowed by

a return under this title and who willfully fails to make such return shall be guilty of

this paragraph shall be equitably apportioned between the lessor and the lessee…”

a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000

Line 14. IRC §179 Expense Deduction. Enter as a negative amount the

or imprisoned not more than 1 year, or both. §40-29-110 provides that any person

amount of Internal Revenue Code Section 179 expense deduction. Enter the same

who willfully attempts to evade any tax imposed by this title or the payment thereof

amount on line 4, Schedule K, in the Federal Amount column.

shall be guilty of a felony and, upon conviction thereof, shall be fined not more than

Line 15. Casualty Losses. Enter as a negative amount the amount of casualty

$100,000 or imprisoned not more than 5 years, or both. These penalties are in ad-

losses. Enter the same amount on line 5, Schedule K, in the Federal Amount

dition to any other penalties provided for by Alabama law.

column.

INFORMATION AT THE SOURCE. Every corporation, association, or agent

Line 16. Portfolio Income or (Loss) Less Expenses. Enter the net amount of

making payments of salaries and wages or similar compensation during a calendar

income or (loss) resulting from reducing portfolio income by the related expenses.

year must file Alabama Form A-2 or Federal Form W-2 on or before the last day

Complete Schedule K by entering the gross amount of portfolio income on line 6 (in

of February of the following calendar year. Also, every corporation, association, or

the Federal Amount column); the interest expense related to the portfolio income

agent not filing Form A-2 and making payments of interest, rents, salaries, wages,

on line 7 (in the Federal Amount column); and, the remaining expenses related to

premiums, annuities, compensations, remuneration, emoluments or other fixed or

the portfolio income on line 8 (in the Federal Amount column). Please provide an

determinable gains, profits and income of $1,500 or more, or payment of dividends

explanation of the nature and amounts for the total amount entered on Schedule K,

of $500 or more to any person, partnership or fiduciary (a resident of Alabama)

line 8. Also, please note, for Alabama Form 20S reporting purposes net capital

during the taxable year is required to file an information return on Forms 96 and 99

gains and losses are not treated as portfolio income, but are added to the federal

showing the amounts of such payments and the name and address of each recipi-

ordinary income or loss from trade or business activities in computing the net Ala-

ent. These forms are due on or before March 15th of the following calendar year.

bama nonseparately stated income or (loss).

Specific Instructions

Line 17. Other Separately Stated Items. Enter the net amount of other sepa-

SCHEDULE A – Computation of Separately Stated and Nonseparately

rately stated business items. Attach a statement providing the type and amount of

Stated Income/Tax

each different separately stated item. Also enter the amount from line 17 on line 9,

The Alabama Department of Revenue’s Web site ( )

Schedule K, in the Federal Amount column.

has available Alabama S Corporation tax laws, regulations, forms and instructions.

Line 18. Net Separately Stated Items. Enter the sum of line 12 through line

Line 1. Enter the ordinary business income (loss) from page 1 of the federal

17.

Form 1120S, U.S. Income Tax Return for an S Corporation. Attach a copy of the

Line 19. Total Separately Stated and Nonseparately Stated Items. Enter the

complete federal Form 1120S.

sum of line 11 and line 18.

Reconciliation to Alabama Basis – Lines 2 through 10

Line 20. Nonseparately Stated Income Allocated and Apportioned to Alabama.

Line 2. Enter the net amount of short-term and long-term capital gains

Enter the amount from Schedule E, line 7. See also Schedule K, line 1 (Alabama

(losses). See also the instructions for line 16 (Portfolio Income Less Expenses).

Amount column).

Line 3. Enter as a negative amount the amount that salaries and wages were

TAX DUE, PAYMENTS, AND CREDITS

reduced on the federal return because of the different federal employment credits

Line 21. DO NOT compute 5% of line 11. The amount on this line should in-

claimed on the federal return.

clude only the following:

Instructions For Form 20s - Preparation Of Alabama Department Of Revenue S Corporation Information/tax Return - 2006 Page 2

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