U.S. corporations file IRS Form 1120; foreign corporations (Canadian corporations) file IRS Form 1120F.
Filers of IRS form 1120 or 1120-S (for S corporations) must file by the 15th of the 3rd month. Canadian corporations carrying on business in the U.S., generally as a branch operation have the same due date.
Extension is available if IRS Form 7004 is filed with estimated tax paid to obtain a 6 month extension. If books and records are in Canada, there is an automatic extension to the 15th of the 6th month. If additional time is needed, Form 7004 must be filed by the 15th of the 6th month with estimated tax paid. Tax is payable by the regular filing due date of the return.
Corporations that have no fixed base in the U.S. but have U.S source income, there is an automatic extension to the 15th of the 6th month to file.
Protective tax returns to obtain tax deductions should IRS determine a fixed base exits. The due date is 18 months from the original due date of the return. It is recommended to file this return where the determination of a permanent establishment is somewhat grey. Filing will start the date in for the IRS assessing period. Treaty-based return IRS Form 8833 must be attached to the U.S. 1120F return disclosing the treaty position and amount of U.S. source gross income. Penalties per IRS Code 6712 for failure to disclose a treaty-based position are $1,000 or $10,000 for C corporations.
State corporate filing may differ from federal due dates with their respective filing extension requirements.
On July 31, 2015, President Obama signed the “SURFACE TRANSPORTATION ACT OF 2015” that including provisins to amend the due date of C corporation corporate returns Form 1120 and partnership tax returns Form 1065. The due date for S corporations has not changed.
C corporations will revert to the 15th of the 4th month. Except C corporations with a June fiscal year, the filing deadline will remain at September 15th until tax years beginning after 2025 when it will become October 15th. An automatic 6-month extension is available for C corporations that do not have a calendar year end;calendar year end C corporations through 2025 will have a 5-month extension.
Effective with 2016 returns, partnerships will have a 15th of the 3rd month filing due date as opposed to the 15th of the 4th month. There is a 6-month extension to file partnership returns to September 15th for calendar year partnerships.
IRS Form 1040-U.S. citizens and green cards holders file Form 1040 due April 15th. Individuals resident in Canada have an automatic extension to June 15th to file. Either may apply for an extension by filing IRS Form 4868 to obtain a filing extension to October 15th. For those who reside in the U.S., tax payable is due on April 15th; for those who reside outside of the U.S., tax is due on June 15th which is the due date of the return.
IRS Form 1040NR-non-U.S. persons file this form to report U.S source income that is not connected to a trade or business if withholding tax was not deducted at source by the U.S. payor. The return is also filed for reporting U.S. source employment income, business income, rental income and sale of U.S. real estate.
If a W2 was issued with payroll withholding, the return is due April 15th; otherwise the due date is June 15th. Tax payable is due by the due date of the return. An filing extension for 6 months from original due date is available if Form 4868 is filed, however tax is still payable by the regular due date, either April 15th or June 15th.
As above, a treaty based return may have to be filed with the 1040/1040NR.
Filing by a U.S. person who owns 10% or more of a foreign corporation. Where more than 50% of the stock is owned directly or indirectly, the filing is more comprehensive and could result in additional complexities if we are dealing with investment corporations or active business corporations that have significant investment income or assets. There is a penalty for failure to file or late file of $10,000. Due date is with the tax return.
Related party transactions for a reportable transactions between the corporation and a foreign or domestic related party with certain exceptions. There is a penalty for failure to file or late file of $10,000. Due date is with the tax return.
These other potential international reporting forms for U.S. persons transfering assets to a foreign corporation/partnership/trust or possibly being subject to the PFIC rules should be reviewed. Effective for 2016, the SURFACE TRANSPORTATION ACT OF 2015 states that the 3520-A is due 4 months after the trust’s tax year instead of 3 months. The 3520 remains with the due date of the tax return, genarally April 15th or June 15th.
Sometimes called FBARs, is due June 30th for U.S. individuals/corporations/domestic trust reporting a financial interest or signing authority over financial accounts in a foreign country if the aggregate value of the accounts exceeds $10,000 at any time in the calendar year. There are no filing extensions. The form must be e-filed. Significant penalties exist for not filing this form. Reference maybe made to http://bsaefiling.fincen.treas.gov/main.html
The July 31, 2015 “SURFACE TRANSPORTATION ACT OF 2015” amends the due date of 2016 FBARs to coincide with an individual taxpayer’s tax return filing due date. For individuals, the 2016 FBAR will be due April 15, 2017, NOT JUNE 30,2017. However in Section 2606(3)(11) of this ACT, there contains reference to Regulation 1.6081-5 of the IRC which confirms that the due date for the 2016 and subsequent years’ FBARs will be automatically extended to June 15th for U.S. filers residing outside of the United States. IRS form 4868 may be filed to extend the due date to October 15th however it is not necessary for the 2016 FBAR filing as the Secretary may waive penalties for first time filers.
NOTE: Taxpayers who are delinquent in tax return or information return filings including FBARS should review the streamlined compliance procedures and the OVDP program for returns and information returns outlined on the IRS website.
Contact your professional advisor prior to implementing any of the outlined strategies
Pursuant to Internal Revenue Service Circular 230, we hereby inform you that the advice set forth herein with respect to U.S. federal tax issues was not intended or written to be used, and cannot be used, by you or any taxpayer, for the purpose of avoiding any penalties that may be imposed on you or any other person under the Internal Revenue Code.