Instructions for IRS Form 1120-PC U.S. Property and Casualty Insurance Company Income Tax Return 2017

January 1, 2017 "Instructions For Form 1120-pc - U.s. Property And Casualty Insurance Company Income Tax Return" contain the updated filing procedures for the IRS-issued Form 1120-PC. Download your copy of the instructions by clicking the link below.

IRS Form 1120-PC is tax form released and collected by the Internal Revenue Service of the United States.

ADVERTISEMENT
2017
Department of the Treasury
Internal Revenue Service
Instructions for
Form 1120-PC
U.S. Property and Casualty Insurance Company Income Tax Return
Future Developments
received from the foreign corporation. This
Section references are to the Internal Revenue
Code unless otherwise noted.
applies to distributions after December 31,
For the latest information about
2017. See new section 245A.
Contents
Page
developments related to Form 1120-PC
What's New . . . . . . . . . . . . . . . . . .
1
and its instructions, such as legislation
Treatment of deferred foreign income
enacted after they were published, go to
upon transition to participation ex-
Reminders . . . . . . . . . . . . . . . . . . .
1
IRS.gov/Form1120PC.
emption system of taxation. U.S.
Photographs of Missing Children . . . .
1
shareholders of specified foreign
The Taxpayer Advocate Service . . . . .
2
What's New
corporations (as defined under section
How To Get Forms and
965(e), as amended by P.L. 115-97) may
Publications . . . . . . . . . . . . . . .
2
Tax rates for fiscal year filers. P.L.
have an inclusion under section 965
General Instructions . . . . . . . . . . . . .
2
115-97 changed the corporation tax rates
based on the post-1986 deferred foreign
Purpose of Form . . . . . . . . . . . .
2
under section 11 for tax years beginning
income of the specified foreign
Who Must File . . . . . . . . . . . . .
2
after 2017. Additionally, section 15
corporations determined as of November
Where To File . . . . . . . . . . . . . .
2
provides rules for using the tax rates
2, 2017 or December 31, 2017. The U.S
Electronic Filing . . . . . . . . . . . .
2
effective before and after a change to
shareholders may elect to pay the liability
When To File . . . . . . . . . . . . . .
2
calculate the tax if the effective date for
under section 965 on the post-1986
Who Must Sign . . . . . . . . . . . . .
3
the change occurs during the tax year.
deferred foreign income in eight
See the discussion under “Schedule J.
Paid Preparer Authorization . . . . .
3
installments. See section 965, as
Tax Computation and Payment” in the
Statements . . . . . . . . . . . . . . .
3
amended. Also, for further guidance see
Instructions for Form 1120.
Assembling the Return . . . . . . . .
3
Section 965 Frequently asked
Questions.
Tax Payments . . . . . . . . . . . . .
3
Disaster tax relief. Disaster tax relief
Increase in penalty for failure to file.
Estimated Tax Payments . . . . . .
4
was enacted for those impacted by
For tax years beginning in 2017, the
Interest and Penalties . . . . . . . . .
4
California wildfires, Tropical Storm
minimum penalty for failure to file a return
Harvey, Hurricane Harvey, Irma, or Maria.
Accounting Methods . . . . . . . . .
4
that is over 60 days late has increased to
See Pub. 976, Disaster Relief, for details
Accounting Period . . . . . . . . . . .
5
the smaller of the tax due or $210. See
and updates.
Rounding Off to Whole
Late filing of
return, later.
Dollars . . . . . . . . . . . . . . . .
5
Form 8975. Certain United States
Foreign-owned domestic disregarded
Recordkeeping . . . . . . . . . . . . .
5
persons that are the ultimate parent entity
entities reporting. A foreign-owned
Other Forms and
of a United States multinational enterprise
domestic disregarded entity may be
Statements That May Be
group with annual revenue for the
required to file Form 5472 even if
Required . . . . . . . . . . . . . . .
5
preceding reporting period of $850 million
otherwise exempt from filing a return. See
Specific Instructions . . . . . . . . . . . . .
5
or more are required to file Form 8975.
Foreign-owned domestic disregarded
Period Covered
. . . . . . . . . . . .
5
Form 8975 and its Schedules A (Form
entities
in the instructions for
Who Must
Name and Address . . . . . . . . . .
5
8975) must be filed with the income tax
File, later.
Identifying Information . . . . . . . .
6
return of the ultimate parent entity of a
Employer Identification
U.S. multinational enterprise group for the
Reminders
Number (EIN) . . . . . . . . . . . .
6
tax year in or within which the reporting
Section 953 Elections . . . . . . . . .
7
period covered by Form 8975 ends. The
Patient-centered outcomes research
Final Return, Name Change,
first required reporting period for an
institute fee. The Patient-Centered
Address Change, or
ultimate parent entity is the 12-month
Outcomes Research Institute fee is
Amended Return . . . . . . . . . .
7
reporting period that begins on or after the
imposed on issuers of specified health
Taxable Income . . . . . . . . . . . .
7
first day of a tax year of the ultimate parent
insurance policies (section 4375) and plan
Tax Computation and
entity that begins on or after June 30,
sponsors of applicable self-insured health
Payments . . . . . . . . . . . . . .
7
2016. For more information, see Form
plans (section 4376) for policy and plan
Schedule A . . . . . . . . . . . . . . .
9
8975, Schedule A (Form 8975) and the
years ending on or after October 1, 2012.
Schedule B, Part I . . . . . . . . . .
14
Instructions for Form 8975 and
See Form 720 and its instructions for
Schedule B, Part II . . . . . . . . . .
15
Schedule A (Form 8975).
more information.
Schedule C . . . . . . . . . . . . . .
15
Deduction for foreign-source portion
Photographs of
Schedule E . . . . . . . . . . . . . .
17
of dividends received by domestic cor-
Schedule F . . . . . . . . . . . . . .
17
Missing Children
porations from specified 10%-owned
Schedule G . . . . . . . . . . . . . .
18
foreign corporations. Certain domestic
The Internal Revenue Service is a proud
Schedule H . . . . . . . . . . . . . .
18
corporations that are U.S. shareholders of
partner with the
National Center for
Schedule I . . . . . . . . . . . . . . .
19
specified 10%-owned foreign corporations
Missing & Exploited Children®
(NCMEC).
Schedule L . . . . . . . . . . . . . .
20
are allowed a 100% deduction
Photographs of missing children selected
(“participation exemption DRD”) for the
Schedule M-1 . . . . . . . . . . . . .
20
by the Center may appear in instructions
foreign-source portion of dividends
Index . . . . . . . . . . . . . . . . . . . . .
22
on pages that would otherwise be blank.
Apr 05, 2018
Cat. No. 64537I
2017
Department of the Treasury
Internal Revenue Service
Instructions for
Form 1120-PC
U.S. Property and Casualty Insurance Company Income Tax Return
Future Developments
received from the foreign corporation. This
Section references are to the Internal Revenue
Code unless otherwise noted.
applies to distributions after December 31,
For the latest information about
2017. See new section 245A.
Contents
Page
developments related to Form 1120-PC
What's New . . . . . . . . . . . . . . . . . .
1
and its instructions, such as legislation
Treatment of deferred foreign income
enacted after they were published, go to
upon transition to participation ex-
Reminders . . . . . . . . . . . . . . . . . . .
1
IRS.gov/Form1120PC.
emption system of taxation. U.S.
Photographs of Missing Children . . . .
1
shareholders of specified foreign
The Taxpayer Advocate Service . . . . .
2
What's New
corporations (as defined under section
How To Get Forms and
965(e), as amended by P.L. 115-97) may
Publications . . . . . . . . . . . . . . .
2
Tax rates for fiscal year filers. P.L.
have an inclusion under section 965
General Instructions . . . . . . . . . . . . .
2
115-97 changed the corporation tax rates
based on the post-1986 deferred foreign
Purpose of Form . . . . . . . . . . . .
2
under section 11 for tax years beginning
income of the specified foreign
Who Must File . . . . . . . . . . . . .
2
after 2017. Additionally, section 15
corporations determined as of November
Where To File . . . . . . . . . . . . . .
2
provides rules for using the tax rates
2, 2017 or December 31, 2017. The U.S
Electronic Filing . . . . . . . . . . . .
2
effective before and after a change to
shareholders may elect to pay the liability
When To File . . . . . . . . . . . . . .
2
calculate the tax if the effective date for
under section 965 on the post-1986
Who Must Sign . . . . . . . . . . . . .
3
the change occurs during the tax year.
deferred foreign income in eight
See the discussion under “Schedule J.
Paid Preparer Authorization . . . . .
3
installments. See section 965, as
Tax Computation and Payment” in the
Statements . . . . . . . . . . . . . . .
3
amended. Also, for further guidance see
Instructions for Form 1120.
Assembling the Return . . . . . . . .
3
Section 965 Frequently asked
Questions.
Tax Payments . . . . . . . . . . . . .
3
Disaster tax relief. Disaster tax relief
Increase in penalty for failure to file.
Estimated Tax Payments . . . . . .
4
was enacted for those impacted by
For tax years beginning in 2017, the
Interest and Penalties . . . . . . . . .
4
California wildfires, Tropical Storm
minimum penalty for failure to file a return
Harvey, Hurricane Harvey, Irma, or Maria.
Accounting Methods . . . . . . . . .
4
that is over 60 days late has increased to
See Pub. 976, Disaster Relief, for details
Accounting Period . . . . . . . . . . .
5
the smaller of the tax due or $210. See
and updates.
Rounding Off to Whole
Late filing of
return, later.
Dollars . . . . . . . . . . . . . . . .
5
Form 8975. Certain United States
Foreign-owned domestic disregarded
Recordkeeping . . . . . . . . . . . . .
5
persons that are the ultimate parent entity
entities reporting. A foreign-owned
Other Forms and
of a United States multinational enterprise
domestic disregarded entity may be
Statements That May Be
group with annual revenue for the
required to file Form 5472 even if
Required . . . . . . . . . . . . . . .
5
preceding reporting period of $850 million
otherwise exempt from filing a return. See
Specific Instructions . . . . . . . . . . . . .
5
or more are required to file Form 8975.
Foreign-owned domestic disregarded
Period Covered
. . . . . . . . . . . .
5
Form 8975 and its Schedules A (Form
entities
in the instructions for
Who Must
Name and Address . . . . . . . . . .
5
8975) must be filed with the income tax
File, later.
Identifying Information . . . . . . . .
6
return of the ultimate parent entity of a
Employer Identification
U.S. multinational enterprise group for the
Reminders
Number (EIN) . . . . . . . . . . . .
6
tax year in or within which the reporting
Section 953 Elections . . . . . . . . .
7
period covered by Form 8975 ends. The
Patient-centered outcomes research
Final Return, Name Change,
first required reporting period for an
institute fee. The Patient-Centered
Address Change, or
ultimate parent entity is the 12-month
Outcomes Research Institute fee is
Amended Return . . . . . . . . . .
7
reporting period that begins on or after the
imposed on issuers of specified health
Taxable Income . . . . . . . . . . . .
7
first day of a tax year of the ultimate parent
insurance policies (section 4375) and plan
Tax Computation and
entity that begins on or after June 30,
sponsors of applicable self-insured health
Payments . . . . . . . . . . . . . .
7
2016. For more information, see Form
plans (section 4376) for policy and plan
Schedule A . . . . . . . . . . . . . . .
9
8975, Schedule A (Form 8975) and the
years ending on or after October 1, 2012.
Schedule B, Part I . . . . . . . . . .
14
Instructions for Form 8975 and
See Form 720 and its instructions for
Schedule B, Part II . . . . . . . . . .
15
Schedule A (Form 8975).
more information.
Schedule C . . . . . . . . . . . . . .
15
Deduction for foreign-source portion
Photographs of
Schedule E . . . . . . . . . . . . . .
17
of dividends received by domestic cor-
Schedule F . . . . . . . . . . . . . .
17
Missing Children
porations from specified 10%-owned
Schedule G . . . . . . . . . . . . . .
18
foreign corporations. Certain domestic
The Internal Revenue Service is a proud
Schedule H . . . . . . . . . . . . . .
18
corporations that are U.S. shareholders of
partner with the
National Center for
Schedule I . . . . . . . . . . . . . . .
19
specified 10%-owned foreign corporations
Missing & Exploited Children®
(NCMEC).
Schedule L . . . . . . . . . . . . . .
20
are allowed a 100% deduction
Photographs of missing children selected
(“participation exemption DRD”) for the
Schedule M-1 . . . . . . . . . . . . .
20
by the Center may appear in instructions
foreign-source portion of dividends
Index . . . . . . . . . . . . . . . . . . . . .
22
on pages that would otherwise be blank.
Apr 05, 2018
Cat. No. 64537I
You can help bring these children home
Where To File
by looking at the photographs and calling
1-800-THE-LOST (1-800-843-5678) if you
File the corporation's return at the applicable IRS address listed below.
recognize a child.
The Taxpayer Advocate
If the corporation's principal business, office,
Service
or agency is located in:
Use the following addresses:
The Taxpayer Advocate Service (TAS) is
Department of the Treasury
an independent organization within the
The United States
Internal Revenue Service
IRS that helps taxpayers and protects
Ogden, UT 84201-0012
taxpayer rights. TAS's job is to ensure that
Internal Revenue Service
every taxpayer is treated fairly and knows
A foreign country or U.S. possession
P.O. Box 409101
and understands their rights under the
Ogden, UT 84409
Taxpayer Bill of
Rights.
As a taxpayer, the corporation has
rights that the IRS must abide by in its
OrderForms
to place an order and have
corporation separate from its owner (the
dealings with the corporation. TAS can
forms mailed to it. The corporation should
foreign corporation) for purposes of the
help the corporation if:
receive its order within 10 business days.
reporting requirements under section
A problem is causing financial difficulty
6038A that apply to 25% foreign-owned
for the business.
General Instructions
domestic corporations. These rules apply
The business is facing an immediate
to a domestic DE owned by a foreign
threat of adverse action.
insurance company that makes an
Purpose of Form
The corporation has tried repeatedly to
election under section 953(c)(3)(C) but do
contact the IRS but no one has
Use Form 1120-PC, U.S. Property and
not apply to a domestic DE owned by a
responded, or the IRS hasn't responded
Casualty Insurance Company Income Tax
foreign insurance company that makes an
by the date promised.
Return, to report the income, gains,
election under section 953(d) (for
The TAS tax toolkit at
losses, deductions, credits, and to figure
information on these elections, see the
TaxpayerAdvocate.IRS.gov
can help the
the income tax liability of insurance
instructions for Item D). If a foreign
corporation understand these rights.
companies, other than life insurance
insurance company electing under section
companies.
953(c)(3)(C) wholly owns a domestic DE,
TAS has offices in every state, the
the DE may be required to file Form 5472.
District of Columbia, and Puerto Rico.
Who Must File
For additional information and
Local advocates' numbers are in their
coordination with Form 5472 filing by the
Every domestic nonlife insurance
local directories and at
domestic DE, see the Instructions for
company and every foreign corporation
TaxpayerAdvocate.IRS.gov/Contact-Us.
Form 5472.
that would qualify as a nonlife insurance
The corporation can also call TAS at
company subject to taxation under section
1-877-777-4778.
Electronic Filing
831, if it were a U.S. corporation, must file
TAS also works to resolve large-scale
Form 1120-PC. This includes
See
IRS.gov/Filing
for the latest
or systemic problems that affect many
organizations described in section 501(m)
information. Also, see
IRS.gov/MeF
and
taxpayers. If the corporation knows of one
(1) that provide commercial-type
click on the link for “Modernized e-File
of these broad issues, please report it to
insurance and organizations described in
Forms” for information on which forms the
TAS through the Systemic Advocacy
section 833.
corporation can or must e-file.
Management System at IRS.gov/SAMS.
Exceptions. A nonlife insurance
When To File
For more information, go to
company that is:
IRS.gov/Advocate.
Generally, a corporation must file its
Exempt under section 501(c)(15)
income tax return by the 15th day of the
should file Form 990, Return of
How To Get Forms
4th month after the end of its tax year. A
Organization Exempt from Income Tax.
new corporation filing a short-period return
and Publications
Subject to taxation under section 831,
must generally file by the 15th day of the
and disposes of its insurance business
4th month after the short period ends. A
Internet. You can access the IRS website
and reserves, or otherwise ceases to be
corporation that has dissolved must
24 hours a day, 7 days a week, at IRS.gov
taxed under section 831, but continues its
generally file by the 15th day of the 4th
to:
corporate existence while winding up and
month after the date it dissolved.
Download forms, instructions, and
liquidating its affairs, should file Form
publications;
1120, U.S. Corporation Income Tax
However, a corporation with a fiscal tax
Order IRS products online;
Return.
year ending June 30 must file by the 15th
Research your tax questions online;
day of the 3rd month after the end of its
Life insurance companies. Life
Search publications online by topic or
tax year. A corporation with a short tax
insurance companies should file Form
keyword;
1120-L, U.S. Life Insurance Company
year ending anytime in June will be
View Internal Revenue Bulletins (IRBs)
Income Tax Return.
treated as if the short year ended on June
published in recent years; and
30, and must file by the 15th day of the 3rd
Sign up to receive local and national tax
Foreign-owned domestic disregarded
month after the end of its tax year.
news by email.
entities. For tax years beginning after
2016 and ending after December 12,
If the due date falls on a Saturday,
Tax forms and publications. The
2017, if a foreign person, including a
Sunday, or legal holiday, the corporation
corporation can download or print all of the
foreign corporation, wholly owns a
can file on the next business day.
forms and publications it may need on
domestic disregarded entity (DE), the
IRS.gov/FormsPubs. Otherwise, the
domestic DE is treated as a domestic
corporation can go to
IRS.gov/
Instructions for Form 1120-PC (2017)
-2-
Paid Preparer
Private Delivery Services
statement that reconciles the NAIC Annual
Statement to the Form 1120-PC.
Authorization
Corporations can use certain private
delivery services (PDS) designated by the
Assembling the Return
If the corporation wants to allow the IRS to
IRS to meet the “timely mailing as timely
discuss its 2017 tax return with the paid
To ensure that the corporation's tax return
filing” rule for tax returns. Go to
IRS.gov/
preparer who signed it, check the “Yes”
is correctly processed, attach all
PDS
for the current list of designated
box in the signature area of the return.
schedules and other forms after page 8 of
services.
This authorization applies only to the
Form 1120-PC in the following order.
individual whose signature appears in the
The PDS can tell you how to get written
1. Schedule N (Form 1120), Foreign
“Paid Preparer Use Only” section of the
proof of the mailing date.
Operations of U.S. Corporations.
return. It does not apply to the firm, if any,
shown in that section.
2. Schedule D (Form 1120), Capital
For the IRS mailing address to use if
Gains and Losses.
you’re using PDS, go to
IRS.gov/
If the “Yes” box is checked, the
PDSstreetAddress.
3. Schedule O (Form 1120), Consent
corporation is authorizing the IRS to call
Plan and Apportionment Schedule for a
the paid preparer to answer any questions
Private delivery services cannot
Controlled Group.
that may arise during the processing of its
deliver items to P.O. boxes. You
!
4. Form 4626, Alternative Minimum
return. The corporation is also authorizing
must use the U.S. Postal Service
CAUTION
Tax—Corporations.
the paid preparer to:
to mail any item to an IRS P.O. box
Give the IRS any information that is
address.
5. Form 8302, Electronic Deposit of
missing from the return,
Tax Refund of $1 Million or More.
Extension of Time To File
Call the IRS for information about the
6. Form 4136, Credit for Federal Tax
processing of the return or the status of
File Form 7004, Application for Automatic
Paid on Fuels.
any related refund or payment(s), and
Extension of Time to File Certain Business
7. Form 8941, Credit for Small
Respond to certain IRS notices about
Income Tax, Information, and Other
Employer Health Insurance Premiums.
math errors, offsets, and return
Returns, to request an extension of time to
preparation.
8. Form 851, Affiliations Schedule.
file. Generally, the corporation must file
9. Additional schedules in
Form 7004 by the regular due date of the
The corporation is not authorizing the
alphabetical order.
return. See the Instructions for Form 7004.
paid preparer to receive any refund check,
10. Additional forms in numerical order.
bind the corporation to anything (including
Who Must Sign
any additional tax liability), or otherwise
11. Supporting statements and
represent the corporation before the IRS.
The return must be signed and dated by:
attachments.
The president, vice-president,
The authorization will automatically end
Complete every applicable entry space
treasurer, assistant treasurer, chief
no later than the due date (excluding
on Form 1120-PC. Do not enter “See
accounting officer; or
extensions) for filing the corporation's
Attached” or “Available Upon Request”
Any other corporate officer (such as tax
2018 tax return. If the corporation wants to
instead of completing the entry spaces. If
officer) authorized to sign.
expand the paid preparer's authorization
more space is needed on the forms or
or revoke the authorization before it ends,
schedules, attach separate sheets using
If a return is filed on behalf of a
see Pub. 947, Practice Before the IRS and
the same size and format as the printed
corporation by a receiver, trustee, or
Power of Attorney.
forms. If there are supporting statements
assignee, the fiduciary must sign the
and attachments, arrange them in the
return, instead of the corporate officer.
Statements
same order as the schedules or forms
Returns and forms signed by a receiver or
they support and attach them last. Show
trustee in bankruptcy on behalf of a
NAIC annual statement. Regulations
the totals on the printed forms. Enter the
corporation must be accompanied by a
section 1.6012-2(c) requires that the NAIC
corporation's name and EIN on each
copy of the order or instructions of the
annual statement be filed with Form
supporting statement or attachment.
court authorizing signing of the return or
1120-PC. A foreign insurance company
form.
Tax Payments
subject to tax under section 831 that is not
required to file an annual statement must
If an employee of the corporation
Generally, the corporation must pay any
file a copy of the pro forma annual
completes Form 1120-PC, the paid
tax due in full no later than the due date for
statement. A penalty for the late filing of a
preparer space should remain blank.
filing its tax return (not including
return may be imposed for not including
Anyone who prepares Form 1120-PC but
extensions). See the instructions for
the annual statement when the return is
does not charge the corporation should
line 16. If the due date falls on a Saturday,
filed. However, see Electronic filing, next.
not complete that section. Generally,
Sunday, or legal holiday, the payment is
anyone who is paid to prepare the return
Electronic filing. If the domestic or
due on the next day that isn't a Saturday,
must sign it and fill in the “Paid Preparer
foreign nonlife insurance company files
Sunday, or legal holiday.
Use Only” area.
Form 1120-PC electronically, do not
Electronic Deposit
attach the annual statement or pro forma
The paid preparer must complete the
Requirement
annual statement to the electronically filed
required preparer information and:
return. However, you must provide a copy
Corporations must use electronic funds
Sign the return in the space provided
of the annual statement or pro forma
transfer to make all federal tax deposits
for the preparer's signature.
annual statement to the Internal Revenue
(such as deposits of employment, excise,
Give a copy of the return to the
Service if requested and retain it with your
and corporate income tax). Generally,
taxpayer.
other tax records for the period required
electronic funds transfers are made using
by the regulations.
the Electronic Federal Tax Payment
Note. A paid preparer may sign original or
System (EFTPS).
amended returns by rubber stamp,
Reconciliation. Corporations that do
mechanical device, or computer software
not file a Schedule M-3 (Form 1120-PC)
If the corporation does not want to use
program.
with the Form 1120-PC must attach a
the EFTPS, it can arrange for its tax
Instructions for Form 1120-PC (2017)
-3-
professional, financial institution, payroll
See the instructions for lines 14c and
Trust fund recovery penalty. This
service, or other trusted third party to
14e, Form 1120-PC, later.
penalty may apply if certain excise,
make deposits on its behalf. Also, it can
income, social security, and Medicare
Estimated tax penalty. A corporation
arrange for its financial institution to
taxes that must be collected or withheld
that does not make estimated tax
submit a same-day payment (discussed
are not collected or withheld, or these
payments when due may be subject to an
later) on its behalf. EFTPS is a free service
taxes are not paid. These taxes are
underpayment penalty for the period of
provided by the Department of the
generally reported on:
underpayment. Generally, a corporation is
Treasury. Services provided by a tax
Form 720, Quarterly Federal Excise
subject to the penalty if its tax liability is
professional, financial institution, payroll
Tax Return;
$500 or more and it did not timely pay at
service, or other third party may have a
Form 941, Employer's QUARTERLY
least the smaller of:
fee.
Federal Tax Return;
Its tax liability for the current year, or
Form 944, Employer's ANNUAL
Its prior year tax.
To get more information about EFTPS
Federal Tax Return; or
or to enroll in EFTPS, visit
www.eftps.gov
See section 6655 for details and
Form 945, Annual Return of Withheld
or call 1-800-555-4477 (TTY/TDD
exceptions, including special rules for
Federal Income Tax.
1-800-733-4829).
large corporations.
The trust fund recovery penalty may be
Use Form 2220, Underpayment of
Depositing on time. To make your
imposed on all persons who are
Estimated Tax by Corporations, to see if
EFTPS deposits on time, the corporation
determined by the IRS to be responsible
the corporation owes a penalty and to
must submit the transaction by 8 p.m.
for collecting, accounting for, or paying
figure the amount of the penalty. If Form
Eastern time the day before the date the
over these taxes, and who acted willfully in
2220 is completed, enter the penalty on
deposit is due. If the corporation uses a
not doing so. The penalty is equal to the
line 15. See the instructions for line 15.
third party to make deposits on its behalf,
full amount of the unpaid trust fund tax.
they may have different cutoff times.
Foreign insurance companies,
See the Instructions for Form 720 or Pub.
see Notice 90-13, 1990-1 C.B.
15 (Circular E), Employer's Tax Guide, for
!
Same-day wire payment option. If the
321, before computing estimated
details, including the definition of
corporation fails to submit a deposit
CAUTION
tax.
responsible persons.
transaction on EFTPS by 8 p.m. Eastern
time the day before the date a deposit is
Other penalties. Other penalties can be
due, it can still make the deposit on time
Interest and Penalties
imposed for negligence, substantial
by using the Federal Tax Collection
understatement of tax, reportable
Service (FTCS). Before using the
If the corporation receives a notice
transaction understatements, and fraud.
same-day wire payment method, the
about penalties after it files its
!
See sections 6662, 6662A, and 6663.
corporation will need to make
return, send the IRS an
CAUTION
arrangements with its financial institution
explanation and we will determine if the
Accounting Methods
ahead of time regarding availability,
corporation meets reasonable cause
Figure taxable income using the method of
deadlines, and costs. Financial institutions
criteria. Do not attach an explanation
accounting regularly used in keeping the
may charge a fee for payments made this
when the corporation's return is filed.
corporation's books and records. In all
way. To learn more about making a
cases, the method used must clearly show
Interest. Interest is charged on taxes
same-day wire payment, go to
IRS.gov/
taxable income. Permissible methods
paid late even if an extension of time to file
SameDayWire.
include cash, accrual, or any other method
is granted. Interest is also charged on
Estimated Tax Payments
authorized by the Internal Revenue Code.
penalties imposed for failure to file,
negligence, fraud, substantial valuation
Generally, the following rules apply to the
The gross amounts of underwriting and
misstatements, substantial
corporation's payments of estimated tax.
investment income should be computed
understatements of tax, and reportable
The corporation must make installment
on the basis of the Statement of Income of
transaction understatements from the due
payments of estimated tax if it expects its
the NAIC annual statement to the extent
date (including extensions) to the date of
total tax for the year (less applicable
not inconsistent with the Internal Revenue
payment. The interest charge is figured at
credits) to be $500 or more.
Code and its Regulations. In all cases, the
a rate determined under section 6621.
The installments are due by the 15th
method used must clearly show taxable
day of the 4th, 6th, 9th, and 12th months
income.
Late filing of return. A corporation that
of the tax year. If any date falls on a
does not file its tax return by the due date,
Change in accounting method.
Saturday, Sunday, or legal holiday, the
including extensions, may be penalized
Generally, the corporation must get IRS
installment is due on the next regular
5% of the unpaid tax for each month or
consent to change either an overall
business day.
part of a month the return is late, up to a
method of accounting or the accounting
The corporation must use electronic
maximum of 25% of the unpaid tax. The
treatment of any material item. To do so,
funds transfer to make installment
minimum penalty for a return that is over
the corporation generally must file Form
payments of estimated tax.
60 days late is the smaller of the tax due
3115, Application for Change in
Use Form 1120-W, Estimated Tax for
or $210 (adjusted for inflation). The
Accounting Method. See the Instructions
Corporations, as a worksheet to compute
penalty will not be imposed if the
for Form 3115 for more information and
estimated tax. See the Instructions for
corporation can show that the failure to file
exceptions, including filing exceptions for
Form 1120-W.
on time was due to reasonable cause. See
qualified small taxpayers and filing
Penalties may apply if the corporation
Caution, earlier.
exceptions for certain first-year tangible
does not make required estimated tax
property changes for small business
Late payment of tax. A corporation that
payment deposits. See Estimated tax
taxpayers. Also, see Pub. 538.
does not pay the tax when due generally
penalty below.
may be penalized
of 1% of the unpaid
1 2
If the corporation overpaid estimated
Safe harbor method of accounting for
tax for each month or part of a month the
tax, it may be able to get a quick refund by
premium acquisition expenses.
tax is not paid, up to a maximum of 25% of
filing Form 4466, Corporation Application
Insurance companies subject to tax under
the unpaid tax. See Caution, earlier.
for Quick Refund of Overpayment of
section 831 are provided with a safe
Estimated Tax.
harbor method of accounting for premium
Instructions for Form 1120-PC (2017)
-4-
acquisition expenses. Form 3115 must be
future and amended returns and in the
annual certification as provided in
filed in order to change to the safe harbor
calculation of earnings and profits.
Regulations section 1.1503-2(g)(2).
method. For more information, see the
Election to reduce basis under section
Other Forms and
Instructions for Form 3115.
362(e)(2)(C). If property is transferred to
Statements That May Be
Certain changes in method of account-
a corporation subject to section 362(e)(2),
ing for organizations to which section
Required
the transferor and the acquiring
833 applies. Blue Cross or Blue Shield
corporation may elect, under section
organizations under section 833(c)(2), or
Reportable transaction disclosure
362(e)(2)(C), to reduce the transferor's
organizations described in section 833(c)
statement. Participants in any reportable
basis in the stock received instead of
(3), can obtain automatic consent to
transaction must file Form 8886,
reducing the acquiring corporation's basis
change the method of accounting for
Reportable Transaction Disclosure
in the property transferred. Once made,
unearned premiums resulting from either a
Statement. See the Instructions for Form
the election is irrevocable. For more
failure to meet the medical loss ratio
8886.
information, see section 362(e)(2) and
(MLR) requirements of section 833(c)(5),
Regulations section 1.362-4. If an election
Reportable transactions by material
or meeting the MLR requirements after
is made, a statement must be filed in
advisors. Material advisors to any
failing to do so in a prior year. Form 3115
accordance with Regulations section
reportable transaction must file Form
must be filed in order to make this change
1.362–4(d)(3).
8918, Material Advisor Disclosure
in accounting method. See the
Statement. See the Instructions for Form
Annual information statement for elec-
Instructions for Form 3115.
8918.
tions under section 108(i). If the
See Rev. Proc. 2017-30.
corporation made an election in 2009 or
Transfers to a corporation controlled
2010 to defer income from cancellation of
by the transferor. Every significant
Accounting Period
debt (COD) in connection with the
transferor (as defined in Regulations
reacquisition of an applicable debt
An insurance company must figure its
section 1.351-3(d)) that receives stock of
instrument, the corporation must attach a
taxable income on the basis of a tax year.
a corporation in exchange for property in a
statement to its return beginning with the
A tax year is the annual accounting period
nonrecognition event must include the
tax year following the tax year for which
an insurance company uses to keep its
statement required by Regulations section
the corporation made the election, and
records and report its income and
1.351-3(a) on or with the transferor's tax
ending the first tax year all income
expenses.
return for the tax year of the exchange.
deferred has been included in income. In
The transferee corporation must include
As a general rule under section 843,
addition, the corporation must annually
the statement required by Regulations
the tax year for every insurance company
include a copy of the election statement it
section 1.351-3(b) on or with its return for
is the calendar year. However, if an
filed to make the election to defer the
the tax year of the exchange, unless all the
insurance company joins in the filing of a
income. For more information regarding
required information is included in any
consolidated return, it may adopt the tax
the annual information statement, see
statement(s) provided by a significant
year of the common parent corporation
Rev. Proc. 2009-37, 2009-36 I.R.B. 309.
transferor that is attached to the same
even if that year is not a calendar year.
For additional information on reporting
return for the same section 351 exchange.
the deferred COD income, see the
Rounding Off to Whole
If the transferor or transferee corporation
instructions for Line 13. Other Income,
is a controlled foreign corporation, each
Dollars
later.
U.S. shareholder (within the meaning of
section 951(b)) must include the required
The corporation can round off cents to
Other forms and statements. See Pub.
whole dollars on its return and schedules.
statement on or with its return.
542, Corporations, for a list of other forms
If the corporation does round to whole
and statements a corporation may need to
Distributions under section 355. Every
dollars, it must round all amounts. To
file in addition to the forms and statements
corporation that makes a distribution of
round, drop amounts under 50 cents and
discussed throughout these instructions.
stock or securities of a controlled
increase amounts from 50 to 99 cents to
corporation, as described in section 355
the next dollar. For example, $1.39
Specific Instructions
(or so much of section 356 as it relates to
becomes $1 and $2.50 becomes $3.
section 355), must include the statement
required by Regulations section
If two or more amounts must be added
Period Covered
1.355-5(a) on or with its return for the year
to figure the amount to enter on a line,
Generally, file the 2017 return for calendar
of the distribution. A significant distributee
include cents when adding the amounts
year 2017. However, if an insurance
(as defined in Regulations section
and round off only the total.
company joins in the filing of a
1.355-5(c)) that receives stock or
Recordkeeping
consolidated return, it may adopt the tax
securities of a controlled corporation must
year of the common parent corporation
include the statement required by
Keep the corporation's records for as long
even if that year is not a calendar year. For
Regulations section 1.355-5(b) on or with
as they may be needed for the
a fiscal or short tax year return, fill in the
its return for the year of receipt. If the
administration of any provision of the
tax year space at the top of the form.
distributing or distributee corporation is a
Internal Revenue Code. Usually, records
controlled foreign corporation, each U.S.
that support an item of income, deduction,
Name and Address
shareholder (within the meaning of section
or credit on the return must be kept for 3
951(b)) must include the statement on or
Enter the corporation's true name (as set
years from the date the return is due or
with its return.
forth in the charter or other legal document
filed, whichever is later. Keep records that
creating it), address, and EIN on the
verify the corporation's basis in property
Dual consolidated losses. If a domestic
appropriate lines. Enter the address of the
for as long as they are needed to figure
corporation incurs a dual consolidated
corporation's principal office or place of
loss (as defined in Regulations section
the basis of the original or replacement
business. Include the suite, room, or other
property.
1.1503-2(c)(5)), the corporation (or
unit number after the street address. If the
consolidated group) may need to attach
The corporation should keep copies of
post office does not deliver mail to the
an elective relief agreement and/or an
all filed returns. They help in preparing
Instructions for Form 1120-PC (2017)
-5-

Download Instructions for IRS Form 1120-PC U.S. Property and Casualty Insurance Company Income Tax Return 2017

745 times
Rate
4.3(4.3 / 5) 37 votes
ADVERTISEMENT