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2013

Department of the Treasury

Internal Revenue Service

Instructions for Form 8804-W

Installment Payments of Section 1446 Tax for Partnerships

the Instructions for Forms 8804, 8805, and

for Forms 8804, 8805, and 8813 for

Section references are to the Internal Revenue

DRAFT AS OF

Code unless otherwise noted.

8813 for more information.

additional information. The netting rules

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

Future Developments

Refiguring Estimated

be considered in determining the category

of income the reduction amounts offset.

For the latest information about

Section 1446 Tax

developments related to Form 8804-W,

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

If, after the partnership figures and makes

and its instructions, such as legislation

reduction amounts resulting from certified

September 19, 2012

an installment payment of estimated

enacted after they were published, go to

partner-level items received from foreign

section 1446 tax, it finds that its section

partners using Form 8804-C. See

1446 tax liability for the year will be more

Certification of Deductions and Losses in

or less than originally estimated, it may

General Instructions

the Instructions for Forms 8804, 8805, and

have to refigure its required installments. If

8813 for additional information. The

earlier installments were underpaid, the

netting rules under section 1(h) and Notice

Who Must Make Estimated

partnership may owe a penalty for

97-59 must be considered in determining

underpayment of estimated tax. An

Section 1446 Tax

the category of income the reduction

immediate catch-up payment should be

Payments

amounts offset.

made to reduce the amount of any penalty

resulting from the underpayment of any

Line 7—Prior Year Safe Harbor

Partnerships generally must make

earlier installments, whether caused by a

installment payments of estimated section

Enter the total section 1446 tax that would

change in estimate, failure to make a

1446 tax if they expect the aggregate tax

have been due for 2012 on ECTI allocable

payment, or a mistake.

on the effectively connected taxable

to foreign partners for 2012, without any

income (ECTI) that is allocable to all

reductions for state and local taxes under

Specific Instructions

foreign partners to be $500 or more.

Regulations section 1.1446-6(c)(1)(iii) or

certified partner-level items. With respect

When To Make Estimated

to the partnership's first installment

Part I—Determination of

Section 1446 Tax

payment, if the 2012 Form 8804 has not

Installment Payments

yet been filed, an estimate is acceptable.

Payments

However, if the partnership later

Complete Form 8804-W for each

The installments are due by the 15th day

determines that this estimate is incorrect,

installment payment of section 1446 tax

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

see Refiguring Estimated Section 1446

based on the information available at the

partnership's tax year. If any date falls on

Tax, earlier.

time of the installment payment.

a Saturday, Sunday, or legal holiday, the

Complete line 7 only if all of the

Lines 1 through 6—Current

installment is due on the next regular

following apply:

business day.

Year Safe Harbor

The prior tax year consisted of 12

Underpayment of

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

months,

the foreign partner's allocable share of

Estimated Section 1446

The partnership timely files (including

ECTI, see Effectively Connected Taxable

Tax

extensions) a U.S. return of partnership

Income in the Instructions for Forms 8804,

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

8805, and 8813. With respect to lines 1e,

A partnership that does not make

year, and

1i, and 1m, enter the specified types of

estimated section 1446 tax payments

The amount of ECTI for the prior tax

ECTI if such partner would be entitled to

when due may be subject to an

year is not less than 50% of the ECTI

use a preferential rate on such income or

underpayment penalty for the period of

expected for the current tax year.

gain (see Regulations section 1.1446-3(a)

underpayment. See Schedule A (Form

Furthermore, the Form 8804 on which the

(2)).

8804) for details.

current year ECTI will be reported must be

If the partnership has net ordinary loss, net

timely filed.

How To Make Estimated

short-term capital loss, or net 28% rate

If any of the above does not apply, skip

Section 1446 Tax

loss, each net loss should be netted

line 7 and enter the amount from line 6 on

against the appropriate categories of

Payments

line 8.

income and gain to determine the

A partnership that is required to make an

amounts of income and gain to be entered

If the partnership qualifies to use the

installment payment of section 1446 tax

on lines 1e, 1i, and 1m, respectively. See

prior year safe harbor and chooses that

must file Form 8813, Partnership

section 1(h) and Notice 97-59, 1997-45

method, it must use that method to pay

I.R.B. 7, for rules for netting gains and

Withholding Tax Payment Voucher

each of its installments during the tax year.

losses.

(Section 1446). Furthermore, the

Furthermore, for each installment

partnership is generally required to notify

payment, the average of that installment

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

each foreign partner of the section 1446

and prior installments during the tax year

reduction amounts for state and local

tax paid on the partner's behalf within 10

must be at least 25% of the amount that

taxes under Regulations section

days of the installment payment due date.

satisfies the partnership's section 1446 tax

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

See Regulations section 1.1446-3(d) and

liability under the prior year safe harbor. If

State and Local Taxes in the Instructions

the partnership does not satisfy both of

Sep 12, 2012

Cat. No. 51675X

Instructions Draft For Form 8804-W - Installment Payments Of Section 1446 Tax For Partnerships - 2013 Page 2

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