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2012

Department of the Treasury

Internal Revenue Service

Instructions for Form

8804-W

must file Form 8813, Partnership

taxes under Regulations section

Section references are to the Internal

Withholding Tax Payment Voucher

1.1446-6(c)(1)(iii). See Reductions for

Revenue Code unless otherwise noted.

(Section 1446). Furthermore, the

State and Local Taxes in the Instructions

partnership is generally required to notify

for Forms 8804, 8805, and 8813 for

What’s New

each foreign partner of the section 1446

additional information. The netting rules

tax paid on the partner’s behalf within 10

under section 1(h) and Notice 97-59 must

•

For partnerships with assets of $1

days of the installment payment due date.

be considered in determining the category

billion or more, the amount of any

See Regulations section 1.1446-3(d) and

of income the reduction amounts offset.

required installment of estimated tax due

the Instructions for Forms 8804, 8805,

Lines 1c, 1g, 1k, and 1o. Enter the

in July, August, or September of 2012,

and 8813 for more information.

reduction amounts resulting from certified

must be increased, and the next required

partner-level items received from foreign

Refiguring Estimated

installment must be decreased in an

partners using Form 8804-C. See

amount to reflect the increase in the

Section 1446 Tax

Certification of Deductions and Losses in

previous installment. See the instructions

the Instructions for Forms 8804, 8805,

for line 10.

If, after the partnership figures and makes

and 8813 for additional information. The

•

The IRS has created a page on

an installment payment of estimated

netting rules under section 1(h) and

IRS.gov that includes information about

section 1446 tax, it finds that its section

Notice 97-59 must be considered in

Form 8804-W and its instructions, at

1446 tax liability for the year will be more

determining the category of income the

Information about

or less than originally estimated, it may

reduction amounts offset.

any future developments affecting Form

have to refigure its required installments.

8804-W (such as legislation enacted after

If earlier installments were underpaid, the

Line 7—Prior Year Safe Harbor

we release it) will be posted on that page.

partnership may owe a penalty for

Enter the total section 1446 tax that would

underpayment of estimated tax. An

have been due for 2011 on ECTI

General Instructions

immediate catch-up payment should be

allocable to foreign partners for 2011,

made to reduce the amount of any

without any reductions for state and local

penalty resulting from the underpayment

Who Must Make Estimated

taxes under Regulations section

of any earlier installments, whether

1.1446-6(c)(1)(iii) or certified partner-level

Section 1446 Tax

caused by a change in estimate, failure to

items. With respect to the partnership’s

make a payment, or a mistake.

Payments

first installment payment, if the 2011 Form

8804 has not yet been filed, an estimate

Partnerships generally must make

is acceptable. However, if the partnership

Specific Instructions

installment payments of estimated section

later determines that this estimate is

1446 tax if they expect the aggregate tax

incorrect, see Refiguring Estimated

on the effectively connected taxable

Part I—Determination of

Section 1446 Tax, earlier.

income (ECTI) that is allocable to all

foreign partners to be $500 or more.

Installment Payments

Complete line 7 only if all of the

following apply:

When To Make Estimated

Complete Form 8804-W for each

•

The prior tax year consisted of 12

installment payment of section 1446 tax

Section 1446 Tax

months,

based on the information available at the

•

The partnership timely files (including

time of the installment payment.

Payments

extensions) a U.S. return of partnership

Lines 1 through 6—Current

The installments are due by the 15th day

income (e.g., Form 1065) for the prior

Year Safe Harbor

of the 4th, 6th, 9th, and 12th months of

year, and

•

the partnership’s tax year. If any date falls

The amount of ECTI for the prior tax

Lines 1a, 1e, 1i, and 1m. To determine

on a Saturday, Sunday, or legal holiday,

year is not less than 50% of the ECTI

the foreign partner’s allocable share of

the installment is due on the next regular

expected for the current tax year.

ECTI, see Effectively Connected Taxable

business day.

Furthermore, the Form 8804 on which the

Income in the Instructions for Forms

current year ECTI will be reported must

8804, 8805, and 8813. With respect to

Underpayment of

be timely filed.

lines 1e, 1i, and 1m, enter the specified

Estimated Section 1446

types of ECTI if such partner would be

If any of the above does not apply,

entitled to use a preferential rate on such

skip line 7 and enter the amount from line

Tax

income or gain (see Regulations section

6 on line 8.

1.1446-3(a)(2)).

A partnership that does not make

If the partnership qualifies to use the

estimated section 1446 tax payments

If the partnership has net ordinary loss,

prior year safe harbor and chooses that

when due may be subject to an

net short-term capital loss, or net 28%

method, it must use that method to pay

underpayment penalty for the period of

rate loss, each net loss should be netted

each of its installments during the tax

underpayment. See Schedule A (Form

against the appropriate categories of

year. Furthermore, for each installment

8804) for details.

income and gain to determine the

payment, the average of that installment

amounts of income and gain to be

and prior installments during the tax year

How To Make Estimated

entered on lines 1e, 1i, and 1m,

must be at least 25% of the amount that

Section 1446 Tax

respectively. See section 1(h) and Notice

satisfies the partnership’s section 1446

97-59, 1997-45 I.R.B. 7, for rules for

tax liability under the prior year safe

Payments

netting gains and losses.

harbor. If the partnership does not satisfy

A partnership that is required to make an

Lines 1b, 1f, 1j, and 1n. Enter the

both of these requirements, it will not

installment payment of section 1446 tax

reduction amounts for state and local

qualify for the prior year safe harbor when

Nov 10, 2011

Cat. No. 51675X

Instructions For Form 8804-W - Estimated Section 1446 Tax Payments - Internal Revenue Service - 2012

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