26 U.S.C. § 6655: Failure by corporation to pay estimated income tax

the underpayment rate established under section 6621, to the amount of the underpayment, for the period of the underpayment. the required installment, over the amount (if any) of the installment paid on or before the due date for the installment. the 15th day of the 4th month following the close of the taxable year, or with respect to any portion of the underpayment, the date on which such portion is paid. For purposes of paragraph (2)(B), a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid. There shall be 4 required installments for each taxable year. In the case of the following required installments: The due date is: 1st April 15 2nd June 15 3rd September 15 4th December 15. Except as otherwise provided in this section, the amount of any required installment shall be 25 percent of the required annual payment. 100 percent of the tax shown on the return for the taxable year (or, if no return is filed, 100 percent of the tax for such year), or 100 percent of the tax shown on the return of the corporation for the preceding taxable year. Except as provided in subparagraph (B), clause (ii) of paragraph (1)(B) shall not apply in the case of a large corporation. Subparagraph (A) shall not apply for purposes of determining the amount of the 1st required installment for any taxable year. Any reduction in such 1st installment by reason of the preceding sentence shall be recaptured by increasing the amount of the next required installment determined under paragraph (1) by the amount of such reduction. the amount of such required installment shall be the annualized income installment (or, if lesser, the adjusted seasonal installment), and any reduction in a required installment resulting from the application of this paragraph shall be recaptured by increasing the amount of the next required installment determined under subsection (d)(1) (as so modified) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this subparagraph). for the first 3 months of the taxable year, in the case of the 1st required installment, for the first 3 months of the taxable year, in the case of the 2nd required installment, for the first 6 months of the taxable year in the case of the 3rd required installment, and for the first 9 months of the taxable year, in the case of the 4th required installment, over the aggregate amount of any prior required installments for the taxable year. The taxable income, adjusted financial statement income (as defined in section 56A), and modified taxable income shall be placed on an annualized basis under regulations prescribed by the Secretary. In the case of the following required installments: The applicable percentage is: 1st 25 2nd 50 3rd 75 4th 100. The term “modified taxable income” has the meaning given such term by section 59A(c)(1). subclause (I) of subparagraph (A)(i) shall be applied by substituting “2 months” for “3 months”, subclause (II) of subparagraph (A)(i) shall be applied by substituting “4 months” for “3 months”, subclause (III) of subparagraph (A)(i) shall be applied by substituting “7 months” for “6 months”, and subclause (IV) of subparagraph (A)(i) shall be applied by substituting “10 months” for “9 months”. subclause (II) of subparagraph (A)(i) shall be applied by substituting “5 months” for “3 months”, subclause (III) of subparagraph (A)(i) shall be applied by substituting “8 months” for “6 months”, and subclause (IV) of subparagraph (A)(i) shall be applied by substituting “11 months” for “9 months”. An election under clause (i) or (ii) shall apply to the taxable year for which made and such an election shall be effective only if made on or before the date required for the payment of the first required installment for such taxable year. 100 percent of the amount determined under subparagraph (C), over the aggregate amount of all prior required installments for the taxable year. This paragraph shall apply only if the base period percentage for any 6 consecutive months of the taxable year equals or exceeds 70 percent. take the taxable income for all months during the taxable year preceding the filing month, divide such amount by the base period percentage for all months during the taxable year preceding the filing month, determine the tax on the amount determined under clause (ii), and multiply the tax computed under clause (iii) by the base period percentage for the filing month and all months during the taxable year preceding the filing month. The base period percentage for any period of months shall be the average percent which the taxable income for the corresponding months in each of the 3 preceding taxable years bears to the taxable income for the 3 preceding taxable years. The term “filing month” means the month in which the installment is required to be paid. The Secretary may by regulations provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances. Any amounts required to be included in gross income under section 951(a) (and credits properly allocable thereto) shall be taken into account in computing any annualized income installment under paragraph (2) in a manner similar to the manner under which partnership income inclusions (and credits properly allocable thereto) are taken into account. subparagraph (A) shall not apply, and for purposes of computing any annualized income installment for such taxable year, the taxpayer shall be treated as having received ratably during such taxable year items of income and credit described in subparagraph (A) in an amount equal to 115 percent of the amount of such items shown on the return of the taxpayer for the preceding taxable year (the second preceding taxable year in the case of the first and second required installments for such taxable year). If a taxpayer making the election under clause (i) is a noncontrolling shareholder of a corporation, clause (i)(II) shall be applied with respect to items of such corporation by substituting “100 percent” for “115 percent”. For purposes of subclause (I), the term “noncontrolling shareholder” means, with respect to any corporation, a shareholder which (as of the beginning of the taxable year for which the installment is being made) does not own (within the meaning of section 958(a)), and is not treated as owning (within the meaning of section 958(b)), more than 50 percent (by vote or value) of the stock in the corporation. Any dividend received from a closely held real estate investment trust by any person which owns (after application of subsection (d)(5) of section 856) 10 percent or more (by vote or value) of the stock or beneficial interests in the trust shall be taken into account in computing annualized income installments under paragraph (2) in a manner similar to the manner under which partnership income inclusions are taken into account. For purposes of subparagraph (A), the term “closely held real estate investment trust” means a real estate investment trust with respect to which 5 or fewer persons own (after application of subsection (d)(5) of section 856) 50 percent or more (by vote or value) of the stock or beneficial interests in the trust. No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax) is less than $500. the tax imposed by section 11 or subchapter L of chapter 1, whichever applies, the tax imposed by section 55, the tax imposed by section 59A, plus the tax imposed by section 887, over the credits against tax provided by part IV of subchapter A of chapter 1. For purposes of this section, the term “large corporation” means any corporation if such corporation (or any predecessor corporation) had taxable income of $1,000,000 or more for any taxable year during the testing period. For purposes of subparagraph (A), the term “testing period” means the 3 taxable years immediately preceding the taxable year involved. For purposes of applying subparagraph (A) to any taxable year in the testing period with respect to corporations which are component members of a controlled group of corporations for such taxable year, the $1,000,000 amount specified in subparagraph (A) shall be divided among such members under rules similar to the rules of section 1561. For purposes of subparagraph (A), taxable income shall be determined without regard to any amount carried to the taxable year under section 172 or 1212(a). Any organization subject to the tax imposed by section 511, and any private foundation, shall be treated as a corporation subject to tax under section 11. Any tax imposed by section 511, and any tax imposed by section 1 or 4940 on a private foundation, shall be treated as a tax imposed by section 11. Any reference to taxable income shall be treated as including a reference to unrelated business taxable income or net investment income (as the case may be). The tax imposed by section 1374(a). The tax imposed by section 1375(a). Any tax for which the S corporation is liable by reason of section 1371(d)(2). Paragraph (2) of subsection (d) shall not apply. the amount determined under clause (i) by only taking into account the taxes referred to in clauses (i) and (iii) of subsection (g)(4)(A), and 100 percent of the tax imposed by section 1375(a) which was shown on the return of the corporation for the preceding taxable year.” The requirement in the last sentence of subsection (d)(1)(B) that the return for the preceding taxable year show a liability for tax shall not apply. Subsection (b)(2)(A) shall be applied by substituting “3rd month” for “4th month”. Any reference in subsection (e) to taxable income shall be treated as including a reference to the net recognized built-in gain or the excess passive income (as the case may be). If the amount of an adjustment under section 6425 made before the 15th day of the 4th month following the close of the taxable year is excessive, there shall be added to the tax under chapter 1 for the taxable year an amount determined at the underpayment rate established under section 6621 upon the excessive amount from the date on which the credit is allowed or the refund is paid to such 15th day. the income tax liability (as defined in section 6425(c)) for the taxable year as shown on the return for the taxable year, exceeds the estimated income tax paid during the taxable year, reduced by the amount of the adjustment. In applying this section to a taxable year beginning on any date other than January 1, there shall be substituted, for the months specified in this section, the months which correspond thereto. This section shall be applied to taxable years of less than 12 months in accordance with regulations prescribed by the Secretary. The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section. Section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [ Pub. L. 111–42 , set out below]. Section 561 of the Hiring Incentives to Restore Employment Act [ Pub. L. 111–147 , set out below]. Section 505 of the United States-Korea Free Trade Agreement Implementation Act [ Pub. L. 112–41 , 19 U.S.C. 3805 note]. Section 603 of the United States-Colombia Trade Promotion Agreement Implementation Act [ Pub. L. 112–42 , 19 U.S.C. 3805 note]. Section 502 of the United States-Panama Trade Promotion Agreement Implementation Act [ Pub. L. 112–43 , 19 U.S.C. 3805 note].” in the case of a corporation with assets of not less than $1,000,000,000 (determined as of the end of the preceding taxable year), the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2017 shall be 100.25 percent of such amount; and the amount of the next required installment after an installment referred to in paragraph (1) shall be appropriately reduced to reflect the amount of the increase by reason of such paragraph.” the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2006 shall be 105 percent of such amount, the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2012 shall be 100 percent of such amount, the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2013 shall be 100.75 percent of such amount, and the amount of the next required installment after an installment referred to in subparagraph (A), (B), or (C) shall be appropriately reduced to reflect the amount of the increase by reason of such subparagraph, 20.5 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2010 shall not be due until October 1, 2010 , and 27.5 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2011 shall not be due until October 1, 2011 .” 100 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2001 shall not be due until October 1, 2001 ; and 20 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2004 shall not be due until October 1, 2004 .” In the case of a large corporation, no addition to tax shall be imposed by section 6655 of the Internal Revenue Code of 1986 with respect to any underpayment of an estimated tax installment to which this subsection applies if no addition would be imposed with respect to such underpayment by reason of section 6655(d)(1) of such Code if such corporation were not a large corporation. The preceding sentence shall apply only to the extent the underpayment is paid on or before the last date prescribed for payment of the most recent installment of estimated tax due on or before September 15, 1987 . This subsection applies to any installment of estimated tax for a taxable year beginning after December 31, 1986 , which is due on or before June 15, 1987 . For purposes of this subsection, the term ‘large corporation’ has the meaning given such term by section 6655(i)(2) of such Code (as in effect on the day before the date of the enactment of this Act [ Dec. 22, 1987 ]).” a corporation made underpayments of estimated tax for a taxable year of the corporation which includes August 1, 1975 , because the corporation intended to elect to have the provisions of subparagraph (B) of section 46(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as it existed before the date of enactment of this Act [ Oct. 4, 1976 ]) apply for such taxable year, and the corporation does not elect to have the provisions of such subparagraph apply for such taxable year because this Act does not contain the amendments made by section 804(a)(2) (relating to flowthrough of investment credit), or the provisions of subsection (f) of such section (relating to grace period for certain plan transfers), of the bill H.R. 10612 (94th Congress, 2d Session), as amended by the Senate,