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annual election (on line 11d, Additional

Airborne Express (Airborne): Overnight

return. The FSC is also authorizing the

Information, on page 2 of the form) to

Air Express Service, Next Afternoon

paid preparer to:

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apply the foreign direct cost tests on a

Service, and Second Day Service.

Give the IRS any information that is

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customer, contract, or product or product

DHL Worldwide Express (DHL): DHL

missing from the return,

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line grouping basis. Any grouping used

“Same Day” Service and DHL USA

Call the IRS for information about the

must be supported by adequate

Overnight.

processing of the return or the status of

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documentation of performance of

Federal Express (FedEx): FedEx

any related refund or payment(s), and

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activities and costs of activities relating to

Priority Overnight, FedEx Standard

Respond to certain IRS notices that the

the grouping used. See Regulations

Overnight, FedEx 2Day, FedEx

FSC has shared with the preparer about

section 1.924(d)-1(e) for details.

International Priority, and FedEx

math errors, offsets, and return

International First.

preparation. The notices will not be sent

Exception for foreign military property.

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United Parcel Service (UPS): UPS Next

to the preparer.

The economic process rules do not apply

Day Air, UPS Next Day Air Saver, UPS

The FSC is not authorizing the paid

to any activities performed in connection

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

preparer to receive any refund check,

with foreign military sales except those

Worldwide Express Plus, and UPS

bind the FSC to anything (including any

activities described in section 924(e). See

Worldwide Express.

additional tax liability), or otherwise

Regulations section 1.924(d)-1(f) for

The private delivery service can tell

represent the FSC before the IRS. If the

details.

you how to get written proof of the mailing

FSC wants to expand the paid preparer’s

Section 925(c) Rule

date.

authorization, see Pub. 947, Practice

Before the IRS and Power of Attorney.

To use the administrative pricing rules to

Extension of time to file. File Form

determine the FSC’s (or small FSC’s)

7004, Application for Automatic Extension

The authorization cannot be revoked.

profit on a transaction or group of

of Time To File Corporation Income Tax

However, the authorization will

transactions, the FSC must perform (or

Return, to request a 6-month extension of

automatically end no later than the due

contract with another person to perform)

time to file.

date (excluding extensions) for filing the

all of the economic process activities

FSC’s 2004 tax return.

Where To File

relating to the transaction or group of

transactions. All of the direct and indirect

Other Forms, Schedules,

File Form 1120-FSC with the Internal

expenses relating to the performance of

Revenue Service Center, Philadelphia,

and Statements That

those activities must be reflected on the

PA 19255.

books of the FSC and on Form

May Be Required

1120-FSC.

Who Must Sign

Under Temporary Regulations section

The FSC may have to file some of the

The return must be signed and dated by:

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

following forms. See the form for more

The president, vice president,

made to include on the FSC’s books all

information.

treasurer, assistant treasurer, chief

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expenses, other than cost of goods sold,

Form W-2, Wage and Tax Statement,

accounting officer or

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that are necessary to figure combined

and Form W-3, Transmittal of Wage and

Any other corporate officer (such as tax

taxable income for the transaction or

Tax Statements. Use these forms to

officer) authorized to sign.

group of transactions. The expenses must

report wages, tips, and other

Receivers, trustees, or assignees must

be identified on Schedule G on the

compensation, and withheld income,

also sign and date any return filed on

applicable line.

social security, and Medicare taxes for

behalf of a corporation.

employees.

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If an employee of the corporation

Who Must File

Form 940 or Form 940-EZ, Employer’s

completes Form 1120-FSC, the paid

Annual Federal Unemployment (FUTA)

File Form 1120-FSC if the corporation

preparer’s space should remain blank.

Tax Return. The FSC may be liable for

elected to be treated as a FSC or small

Anyone who prepares Form 1120-FSC

FUTA tax and may have to file Form 940

FSC, and the election is still in effect.

but does not charge the corporation

or Form 940-EZ if it either:

should not complete that section.

Note: A FSC that elects to be treated as

1. Paid wages of $1,500 or more in

Generally, anyone who is paid to prepare

a domestic corporation under section

any calendar quarter in 2002 or 2003 or

the return must sign it and fill in the “Paid

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

2. Had one or more employees who

Preparer’s Use Only” area.

Instead, it files Form 1120 (or Form

worked for the FSC for at least some part

1120-A).

The paid preparer must complete the

of a day in any 20 or more different weeks

required preparer information and —

in 2002 or 20 or more different weeks in

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Sign the return in the space provided

When To File

2003.

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for the preparer’s signature.

Form 941, Employer’s Quarterly

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Generally, a corporation must file Form

Give a copy of the return to the

Federal Tax Return. Employers must file

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

taxpayer.

this form to report income tax withheld,

month after the end of its tax year. A FSC

and employer and employee social

that has dissolved must generally file by

Paid Preparer

security and Medicare taxes. Also, see

the 15th day of the 3rd month after the

Trust fund recovery penalty on page 7.

Authorization

date it dissolved.

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Form 945, Annual Return of Withheld

If the FSC wants to allow the IRS to

If the due date falls on a Saturday,

Federal Income Tax. File Form 945 to

discuss its 2003 tax return with the paid

Sunday, or legal holiday, the FSC may file

report income tax withheld from

preparer who signed it, check the “Yes”

on the next business day.

nonpayroll distributions or payments.

box in the signature area of the return.

Also, see Trust fund recovery penalty

Private delivery services. FSCs can

This authorization applies only to the

on page 7.

use certain private delivery services

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individual whose signature appears in the

Form 1042, Annual Withholding Tax

designated by the IRS to meet the “timely

“Paid Preparer’s Use Only” section of the

Return for U.S. Source Income of Foreign

mailing as timely filing/paying” rule for tax

FSC’s return. It does not apply to the firm,

Persons,

returns and payments. The most recent

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if any, shown in that section.

Form 1042-S, Foreign Person’s U.S.

list of designated private delivery services

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

Source Income Subject to Withholding,

was published by the IRS in September

authorizing the IRS to call the paid

and

2002.

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preparer to answer any questions that

Form 1042-T, Annual Summary and

The list includes only the following:

may arise during the processing of its

Transmittal of Forms 1042-S. Use these

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Instructions For Form 1120-Fsc - U.s. Income Tax Return Of A Foreign Sales Corporation - 2003 Page 4

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