2220 Underpayment of Estimated Tax by Corporations

2006 Form 2220, Underpayment of Estimated Tax by Corporations

Purpose: This is the first circulated draft of the 2006 form 2220 for your review and
comments. See below for a discussion of the major changes.
TPCC Meeting: None, but one may be arranged if requested.
Prior Version: The 2005 Form 2220 is available at:
http://www.irs.gov/pub/irs-pdf/f2220.pdf
Other Products: Circulations of draft tax forms, instructions, notices, and publications
are posted at:
http://taxforms.web.irs.gov/draft_products.html
Comments: Please email, fax, call, or mail any comments by July 3, 2006.

Kelli Patilla
Tax Forms and Publications
SE:W:CAR:MP:T:B
Email: [email protected]
Phone: 202-622-3186
Fax: 202-622-3305

Major changes to the 2006 Form 2220
Text on line 10 of page 1 and line 35 on page 4 was revised to reflect Sec. 401 of H.R.
4297, which provides special rules for corporations with assets of $1 billion or more.
Throughout the form we updated the year, as applicable, and made minor editorial
changes, including changes to conform to the Division Style Guide.

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Form

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 2220, PAGE 1 OF 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE: NONE
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

2220

Action

Date

O.K. to print
Revised proofs
requested

Underpayment of Estimated Tax by Corporations

Department of the Treasury
Internal Revenue Service
Name

©

Signature

OMB No. 1545-0142

See separate instructions.

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©

2006

Attach to the corporation’s tax return.

Employer identification number

Note: Generally, the corporation is not required to file Form 2220 (see Part II below for exceptions) because the IRS will figure any penalty
owed and bill the corporation. However, the corporation may still use Form 2220 to figure the penalty. If so, enter the amount from page
2, line 34 on the estimated tax penalty line of the corporation’s income tax return, but do not attach Form 2220.

Part I
1

Required Annual Payment

Total tax (see instructions)

1

2a Personal holding company tax (Schedule PH (Form 1120), line 26) included on line 1

2a

b Look-back interest included on line 1 under section 460(b)(2) for completed long-term
contracts or section 167(g) for depreciation under the income forecast method

2b

c Credit for Federal tax paid on fuels (see instructions)

2c

d Total. Add lines 2a through 2c

2d

3

Subtract line 2d from line 1. If the result is less than $500, do not complete or file this form. The corporation
does not owe the penalty

3

4

Enter the tax shown on the corporation’s 2005 income tax return (see instructions). Caution: If the tax is zero
or the tax year was for less than 12 months, skip this line and enter the amount from line 3 on line 5

4

Required Annual Payment. Enter the smaller of line 3 or line 4. If the corporation is required to skip line 4,
enter the amount from line 3

5

5

Part II Reasons for Filing—Check the boxes below that apply. If any boxes are checked, the corporation must file
Form 2220 even if it does not owe a penalty (see instructions).
6
7
8

The corporation is using the adjusted seasonal installment method.
The corporation is using the annualized income installment method.
The corporation is a “large corporation” figuring its first required installment based on the prior year’s tax.

Part III Figuring the Underpayment
(a)
9

10

11

Installment due dates. Enter in columns (a) through
(d) the 15th day of the 4th (Form 990-PF filers:
Use 5th month), 6th, 9th, and 12th months of the
corporation’s tax year

(b)

(c)

(d)

9

Required installments. If the box on line 6 and/or line 7 above
is checked, enter the amounts from Schedule A, line 38. If the
box on line 8 (but not 6 or 7) is checked, see instructions for
the amounts to enter. If none of these boxes are checked,
enter 25% of line 5 above in each column

10

Estimated tax paid or credited for each period (see
instructions). For column (a) only, enter the amount from line
11 on line 15

11

. Special rules apply
to corporations with
assets of $1 billion
or more (see
instructions)

Complete lines 12 through 18 of one column before
going to the next column.
12

Enter amount, if any, from line 18 of the preceding column

12

13

Add lines 11 and 12

13

14

Add amounts on lines 16 and 17 of the preceding column

14

15

Subtract line 14 from line 13. If zero or less, enter -0-

15

16

If the amount on line 15 is zero, subtract line 13 from line
14. Otherwise, enter -0-

16

17

18

Underpayment. If line 15 is less than or equal to line 10, subtract
line 15 from line 10. Then go to line 12 of the next column.
17
Otherwise, go to line 18
Overpayment. If line 10 is less than line 15, subtract line 10
from line 15. Then go to line 12 of the next column
18
Go to Part IV on page 2 to figure the penalty. Do not go to Part IV if there are no entries on line 17—no penalty is owed.

For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 11746L

Form

2220

(2006)

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 2220, PAGE 2 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 2220 (2006)

Part IV Figuring the Penalty

Page

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(a)

19 Enter the date of payment or the 15th day of the 3rd month
after the close of the tax year, whichever is earlier (see
instructions). (Form 990-PF and Form 990-T filers: Use 5th
month instead of 3rd month.)

19

20 Number of days from due date of installment on line 9 to the
date shown on line 19

20

21 Number of days on line 20 after 4/15/2006 and before X/1/200X

21

22 Underpayment on line 17 × Number of days on line 21 × 7%
365

22

23 Number of days on line 20 after X/30/2006 and before X/1/200X

23

24 Underpayment on line 17 × Number of days on line 23 × X%
365

24

25 Number of days on line 20 after 3/31/2007 and before 7/1/2007

25

26 Underpayment on line 17 × Number of days on line 25 × *%
365

26

27 Number of days on line 20 after 6/30/2007 and before 10/1/2007

27

28 Underpayment on line 17 × Number of days on line 27 × *%
365

28

29 Number of days on line 20 after 9/30/2007 and before 1/1/2008

29

30 Underpayment on line 17 × Number of days on line 29 × *%
365

30

31 Number of days on line 20 after 12/31/2007 and before 2/16/2008

31

32 Underpayment on line 17 × Number of days on line 31 × *%
366
33 Add lines 22, 24, 26, 28, 30, and 32

(b)

(c)

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

32

$

$

$

$

33

$

$

$

$

34 Penalty. Add columns (a) through (d) of line 33. Enter the total here and on Form 1120, line 33;
Form 1120-A, line 29; or the comparable line for other income tax returns

34

2

(d)

$

*For underpayments paid after March 31, 2007: For lines 26, 28, 30, and 32, use the penalty interest rate for each calendar
quarter, which the IRS will determine during the first month in the preceding quarter. These rates are published quarterly in an IRS
News Release and in a revenue ruling in the Internal Revenue Bulletin. To obtain this information on the Internet, access the IRS
website at www.irs.gov. You can also call 1-800-829-4933 to get interest rate information.
Form

2220

(2006)

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 2220, PAGE 3 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 2220 (2006)

Page

3

Schedule A Adjusted Seasonal Installment Method and Annualized Income Installment Method
(see instructions)

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Form 1120S filers: For lines 1, 2, 3, and 21, below, “taxable income” refers to excess net passive income or the amount on which tax is
imposed under section 1374(a), whichever applies.

Part I Adjusted Seasonal Installment Method (Caution: Use this method only if the base period percentage
(a)
(b)
(c)
(d)
for any 6 consecutive months is at least 70%. See instructions.)
1

First 3
months

First 5
months

First 8
months

First 11
months

First 4
months

First 6
months

First 9
months

Entire year

Enter taxable income for the following periods:
a Tax year beginning in 2003
b Tax year beginning in 2004
c Tax year beginning in 2005

2

Enter taxable income for each period for the tax year beginning
in 2006.

3

1a

1b
1c
2

Enter taxable income for the following periods:
a Tax year beginning in 2003
b Tax year beginning in 2004
c Tax year beginning in 2005

3a

3b
3c

4

Divide the amount in each column on line 1a by the amount in
column (d) on line 3a.

4

5

Divide the amount in each column on line 1b by the amount in
column (d) on line 3b.

5

6

Divide the amount in each column on line 1c by the amount in
column (d) on line 3c.

6

7

Add lines 4 through 6.

7

8

Divide line 7 by 3.

8

9

Divide line 2 by line 8.

9

10

Figure the tax on the amount on line 9 using the instructions for Form
1120, Schedule J, line 2 (or comparable line of corporation’s return).

10

11a Divide the amount in columns (a) through (c) on line 3a by the
amount in column (d) on line 3a.

11a

b Divide the amount in columns (a) through (c) on line 3b by the
amount in column (d) on line 3b.

11b

c Divide the amount in columns (a) through (c) on line 3c by the
amount in column (d) on line 3c.

11c

12

Add lines 11a through 11c.

12

13

Divide line 12 by 3.

13

14

Multiply the amount in columns (a) through (c) of line 10 by columns (a) through
(c) of line 13. In column (d), enter the amount from line 10, column (d).

14

15

Enter any alternative minimum tax for each payment period (see
instructions).

15

16

Enter any other taxes for each payment period (see instructions).

16

17

Add lines 14 through 16.

17

18

For each period, enter the same type of credits as allowed on
Form 2220, lines 1 and 2c (see instructions).

18

19

Total tax after credits. Subtract line 18 from line 17. If zero or
less, enter -0-.

19
Form

2220

(2006)

1
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 2220, PAGE 4 of 4
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 2220 (2006)

Part II

Page

Annualized Income Installment Method

20 Annualization periods (see instructions).

(a)

(b)

(c)

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20

21 Enter taxable income for each annualization period (see
instructions).

21

22 Annualization amounts (see instructions).

22

23 Annualized taxable income. Multiply line 21 by line 22.

First
months

First
months

First
months

4

(d)
First
months

23

24 Figure the tax on the amount on line 23 using the instructions for
Form 1120, Schedule J, line 2 (or comparable line of corporation’s
return).

24

25 Enter any alternative minimum tax for each payment period (see
instructions).

25

26 Enter any other taxes for each payment period (see instructions).

26

27 Total tax. Add lines 24 through 26.

27

28 For each period, enter the same type of credits as allowed on
Form 2220, lines 1 and 2c (see instructions).

28

29 Total tax after credits. Subtract line 28 from line 27. If zero or
less, enter -0-.

29

30 Applicable percentage.

30

31 Multiply line 29 by line 30.

31

25%

50%

75%

100%

1st
installment

2nd
installment

3rd
installment

4th
installment

Part III Required Installments
Note: Complete lines 32 through 38 of one column before
completing the next column.
32 If only Part I or Part II is completed, enter the amount in each
column from line 19 or line 31. If both parts are completed, enter
the smaller of the amounts in each column from line 19 or
line 31.

32

33 Add the amounts in all preceding columns of line 38 (see
instructions).

33

34 Adjusted seasonal or annualized income installments.
Subtract line 33 from line 32. If zero or less, enter -0-.

34

35 Enter 25% of line 5 on page 1 of Form 2220 in each column.
(Note: “Large corporations,” see the instructions for line 10 for
the amounts to enter.)
36 Subtract line 38 of the preceding column from line 37 of the
preceding column.

35

37 Add lines 35 and 36.

37

38 Required installments. Enter the smaller of line 34 or line 37
here and on page 1 of Form 2220, line 10 (see instructions).

38

36

Form

Printed on recycled paper

2220

(2006)