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the performance of those activities must be

behalf of a FSC must be accompanied by a

Corporations. This form may have to be filed

reflected on the books of the FSC and on

copy of the order or instructions of the court

by certain U.S. officers, directors, or

Form 1120-FSC.

authorizing signing of the return or form.

shareholders of a FSC to report changes in

ownership (see sections 6046 and the

If an employee of the FSC completes

Under Temporary Regulations section

related regulations).

1.925(a)-1T(b)(2)(ii), an election may be

Form 1120-FSC, the paid preparer’s space

should remain blank. Anyone who prepares

If a Form 1120-FSC is filed, Form 5471 is

made to include on the FSC’s books all

not required to be filed to satisfy the

expenses, other than cost of goods sold,

Form 1120-FSC but does not charge the

FSC should not complete that section.

requirements of section 6038 (see

that are necessary to figure combined

Temporary Regulations section

taxable income for the transaction or group

Generally, anyone who is paid to prepare

the return must sign it and fill in the “Paid

1.921-1T(b)(3)). However, certain U.S.

of transactions. The expenses must be

shareholders may be required to file Form

identified on Schedule G on the applicable

Preparer’s Use Only” area.

5471 and the applicable schedules to report

line.

The paid preparer must complete the

subpart F income.

required preparer information and —

•

Who Must File

Certain U.S. officers, directors, and

Sign the return in the space provided for

shareholders of a FSC that is a foreign

the preparer’s signature.

File Form 1120-FSC if the corporation

•

personal holding company may have to file

Give a copy of the return to the taxpayer.

elected to be treated as a FSC or small

Form 5471 and appropriate schedules. See

FSC, and the election is still in effect.

Note. A preparer may sign original returns,

Foreign personal holding company on page

amended returns, or requests for filing

Note. A FSC that elects to be treated as a

5 for details.

extensions by rubber stamp, mechanical

domestic corporation under section

See the instructions for Form 5471 for

device, or computer software programs.

943(e)(1) does not file Form 1120-FSC.

more information.

Instead, it files Form 1120 (or Form 1120-A).

•

Paid Preparer

Form 5472, Information Return of a 25%

Foreign-Owned U.S. Corporation or a

When To File

Authorization

Foreign Corporation Engaged in a U.S.

Generally, a corporation must file Form

Trade or Business. Generally, a FSC that is

If the FSC wants to allow the IRS to discuss

1120-FSC by the 15th day of the 3rd month

engaged in a trade or business in the United

its 2004 tax return with the paid preparer

after the end of its tax year. A FSC that has

States that had a reportable transaction with

who signed it, check the “Yes” box in the

dissolved must generally file by the 15th day

a foreign or domestic related party during

signature area of the return. This

of the 3rd month after the date it dissolved.

the tax year must file Form 5472.

authorization applies only to the individual

•

If the due date falls on a Saturday,

whose signature appears in the “Paid

Form 5713, International Boycott Report.

Sunday, or legal holiday, the FSC may file

Preparer’s Use Only” section of the FSC’s

FSCs that had operations in, or related to,

on the next business day.

return. It does not apply to the firm, if any,

certain “boycotting” countries file Form

shown in that section.

5713.

Private delivery services. FSCs can use

•

certain private delivery services designated

Form 8275, Disclosure Statement, and

If the “Yes” box is checked, the FSC is

by the IRS to meet the “timely mailing as

Form 8275-R, Regulation Disclosure

authorizing the IRS to call the paid preparer

timely filing/paying” rule for tax returns and

Statement. Disclose items or positions taken

to answer any questions that may arise

payments. These private delivery services

on a tax return that are not otherwise

during the processing of its return. The FSC

include only the following.

adequately disclosed on a tax return or that

is also authorizing the paid preparer to:

•

are contrary to Treasury regulations (to

Give the IRS any information that is

DHL Express (DHL): DHL Same Day

avoid parts of the accuracy-related penalty

missing from the return,

Service, DHL Next Day 10:30 am, DHL Next

•

or certain preparer penalties).

Call the IRS for information about the

Day 12:00 pm, DHL Next Day 3:00 pm, and

•

processing of the return or the status of any

Form 8300, Report of Cash Payments

DHL 2nd Day Service.

•

related refund or payment(s), and

Over $10,000 Received in a Trade or

Federal Express (FedEx): FedEx Priority

•

Respond to certain IRS notices that the

Business. Use this form to report the receipt

Overnight, FedEx Standard Overnight,

FSC has shared with the preparer about

of more than $10,000 in cash or foreign

FedEx 2Day, FedEx International Priority;

math errors, offsets, and return preparation.

currency in one transaction or a series of

and FedEx International Priority, and FedEx

The notices will not be sent to the preparer.

related transactions.

International First.

•

United Parcel Service (UPS): UPS Next

Form 8886, Reportable Transaction

The FSC is not authorizing the paid

Day Air, UPS Next Day Air Saver, UPS 2nd

Disclosure Statement. Use this form to

preparer to receive any refund check, bind

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

disclose information for each reportable

the FSC to anything (including any

Worldwide Express Plus, and UPS

transaction in which the FSC participated.

additional tax liability), or otherwise

Worldwide Express.

Form 8886 must be filed for each tax year

represent the FSC before the IRS. If the

that the Federal Income tax liability of the

FSC wants to expand the paid preparer’s

The private delivery service can tell you

FSC is affected by its participation in the

authorization, see Pub. 947, Practice Before

how to get written proof of the mailing date.

transaction. The FSC may have to pay a

the IRS and Power of Attorney.

Extension of time to file. File Form 7004,

penalty if it is required to file Form 8886 and

The authorization cannot be revoked.

Application for Automatic Extension of Time

does not do so. The following are reportable

However, the authorization will automatically

To File Corporation Income Tax Return, to

transactions.

end no later than the due date (excluding

request a 6-month extension of time to file.

1. Any listed transaction which is a

extensions) for filing the FSC’s 2005 tax

transaction that is the same as or

Where To File

return.

substantially similar to tax avoidance

File Form 1120-FSC with the Internal

transactions identified by the IRS.

Other Forms That May Be

Revenue Service Center, Philadelphia, PA

2. Any transaction offered under

Required

19255.

conditions of confidentiality for which the

FSC paid an advisor a fee of at least

The FSC may have to file some of the forms

Who Must Sign

$250,000.

listed below. See the form for more

The return must be signed and dated by:

information.

3. Certain transactions for which the

•

The president, vice president, treasurer,

FSC has contractual protection against

For a list of additional forms the FSC

assistant treasurer, chief accounting officer

disallowance of the tax benefits.

may need to file (most notably, forms

4. Certain transactions resulting in a

pertaining to the reporting of various types

•

Any other corporate officer (such as tax

loss of at least $10 million in any single year

of income, and any related withholding, to

officer) authorized to sign.

or $20 million in any combination of years.

U.S. persons, foreign persons, and the IRS),

If a return is filed on behalf of a FSC by a

see Other Forms That May Be Required in

5. Certain transactions resulting in a

receiver, trustee or assignee, the fiduciary

the Instructions for the Forms 1120 and

book-tax difference of more than $10 million

must sign the return, instead of the

1120-A.

on a gross basis. For exceptions, see Rev.

•

corporate officer. Returns and forms signed

Form 5471, Information Return of U.S.

Proc. 2003-24, 2003-11 I.R.B. 599, and

by a receiver or trustee in bankruptcy on

Persons With Respect to Certain Foreign

Rev. Proc. 2003-25, 2003-11 I.R.B. 601.

-4-

Instructions For Form 1120-Fsc - U.s. Income Tax Return Of A Foreign Sales Corporation - 2004 Page 4

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