§6037 — Return of S corporation
21 citing cases
Statute Text — 26 U.S.C. §6037
Every S corporation shall make a return for each taxable year, stating specifically the items of its gross income and the deductions allowable by subtitle A, the names and addresses of all persons owning stock in the corporation at any time during the taxable year, the number of shares of stock owned by each shareholder at all times during the taxable year, the amount of money and other property distributed by the corporation during the taxable year to each shareholder, the date of each such distribution, each shareholder’s pro rata share of each item of the corporation for the taxable year, and such other information, for the purpose of carrying out the provisions of subchapter S of chapter 1, as the Secretary may by forms and regulations prescribe. Any return filed pursuant to this section shall, for purposes of chapter 66 (relating to limitations), be treated as a return filed by the corporation under section 6012.
Each S corporation required to file a return under subsection (a) for any taxable year shall (on or before the day on which the return for such taxable year was filed) furnish to each person who is a shareholder at any time during such taxable year a copy of such information shown on such return as may be required by regulations.
A shareholder of an S corporation shall, on such shareholder’s return, treat a subchapter S item in a manner which is consistent with the treatment of such item on the corporate return.
In the case of any subchapter S item, if—
the corporation has filed a return but the shareholder’s treatment on his return is (or may be) inconsistent with the treatment of the item on the corporate return, or
the corporation has not filed a return, and
the shareholder files with the Secretary a statement identifying the inconsistency,
paragraph (1) shall not apply to such item.
A shareholder shall be treated as having complied with clause (ii) of subparagraph (A) with respect to a subchapter S item if the shareholder—
demonstrates to the satisfaction of the Secretary that the treatment of the subchapter S item on the shareholder’s return is consistent with the treatment of the item on the schedule furnished to the shareholder by the corporation, and
elects to have this paragraph apply with respect to that item.
In any case—
described in subparagraph (A)(i)(I) of paragraph (2), and
in which the shareholder does not comply with subparagraph (A)(ii) of paragraph (2),
any adjustment required to make the treatment of the items by such shareholder consistent with the treatment of the items on the corporate return shall be treated as arising out of mathematical or clerical errors and assessed according to section 6213(b)(1). Paragraph (2) of section 6213(b) shall not apply to any assessment referred to in the preceding sentence.
For purposes of this subsection, the term “subchapter S item” means any item of an S corporation to the extent that regulations prescribed by the Secretary provide that, for purposes of this subtitle, such item is more appropriately determined at the corporation level than at the shareholder level.
For addition to tax in the case of a shareholder’s negligence in connection with, or disregard of, the requirements of this section, see part II of subchapter A of chapter 68.
Treasury Regulations
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Treas. Reg. §1.6037-1Return of electing small business corporation
(a) In general. Every small business corporation (as defined in section 1371(a)) which has made an election under section 1372(a) not to be subject to the tax imposed by chapter 1 of the Code shall file, with respect to each taxable year for which the election is in effect, a return of income on Form 1120-S. The return shall set forth the items of gross income and the deductions allowable in computing taxable income as required by the return form or in the instructions issued with respect thereto and shall be signed in accordance with section 6062 by the person authorized to sign a return. The return shall also set forth the following information concerning the electing small business corporation:
(1) The names and addresses of all persons owning stock in the corporation at any time during the taxable year;
(2) The number of shares of stock owned by each shareholder at all times during the taxable year;
(3) The amount of money and other property distributed by the corporation during the taxable year to each shareholder;
(4) The date of each distribution of money and other property; and
(5) Such other information as is required by the form or by the instructions issued with respect to such form.
(b) Time and place for filing return. The return shall be filed on or before the 15th day of the third month following the close of the taxable year with the internal revenue officer designated in the instructions applicable to Form 1120-S. (See section 6072.)
(c) Other provisions. The return on Form 1120-S will be treated as a return filed by the corporation under section 6012, relating to persons required to make returns of income, for purposes of the provisions of chapter 66 of the Code, relating to limitations. Thus, for example, the period of limitation on assessment and collection of any corporate tax found to be due upon a subsequent determination that the corporation was not entitled to the benefits of subchapter S, chapter 1 of the Code, will run from the date of filing the return under section 6037, or from the date prescribed for filing such return, whichever is the later. For the rules requiring the disclosure of certain transactions, see § 1.6011-4T.
(d) Penalties. For criminal penalties for failure to file a return, supply information, or pay tax, and for filing a false or fraudulent return, statement, or other document, see sections 7203, 7206, and 7207.
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Treas. Reg. §1.6037-1(a)In general.
In general. Every small business corporation (as defined in section 1371(a)) which has made an election under section 1372(a) not to be subject to the tax imposed by chapter 1 of the Code shall file, with respect to each taxable year for which the election is in effect, a return of income on Form 1120-S. The return shall set forth the items of gross income and the deductions allowable in computing taxable income as required by the return form or in the instructions issued with respect thereto and shall be signed in accordance with section 6062 by the person authorized to sign a return. The return shall also set forth the following information concerning the electing small business corporation:
(1) The names and addresses of all persons owning stock in the corporation at any time during the taxable year;
(2) The number of shares of stock owned by each shareholder at all times during the taxable year;
(3) The amount of money and other property distributed by the corporation during the taxable year to each shareholder;
(4) The date of each distribution of money and other property; and
(5) Such other information as is required by the form or by the instructions issued with respect to such form.
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Treas. Reg. §1.6037-1(b)Time and place for filing return.
Time and place for filing return. The return shall be filed on or before the 15th day of the third month following the close of the taxable year with the internal revenue officer designated in the instructions applicable to Form 1120-S. (See section 6072.)
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Treas. Reg. §1.6037-1(c)Other provisions.
Other provisions. The return on Form 1120-S will be treated as a return filed by the corporation under section 6012, relating to persons required to make returns of income, for purposes of the provisions of chapter 66 of the Code, relating to limitations. Thus, for example, the period of limitation on assessment and collection of any corporate tax found to be due upon a subsequent determination that the corporation was not entitled to the benefits of subchapter S, chapter 1 of the Code, will run from the date of filing the return under section 6037, or from the date prescribed for filing such return, whichever is the later. For the rules requiring the disclosure of certain transactions, see § 1.6011-4T.
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Treas. Reg. §1.6037-1(d)Penalties.
Penalties. For criminal penalties for failure to file a return, supply information, or pay tax, and for filing a false or fraudulent return, statement, or other document, see sections 7203, 7206, and 7207.
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Treas. Reg. §1.6037-2Required use of electronic form for income tax returns of electing small business corporations
(a) In general. The return of an electing small business corporation that is required to be filed electronically under § 301.6037-2 of this chapter must be filed in accordance with IRS revenue procedures, publications, forms, or instructions, including those posted electronically.
(b) Applicability date. The rules of this section apply to returns required to be filed for taxable years ending on or after December 31, 2023.
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Treas. Reg. §1.6037-2(a)In general.
In general. The return of an electing small business corporation that is required to be filed electronically under § 301.6037-2 of this chapter must be filed in accordance with IRS revenue procedures, publications, forms, or instructions, including those posted electronically.
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Treas. Reg. §1.6037-2(b)Applicability date.
Applicability date. The rules of this section apply to returns required to be filed for taxable years ending on or after December 31, 2023.
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Treas. Reg. §301.6037-1Return of electing small business corporation
For provisions relating to requirement of return of electing small business corporation, see § 1.6037-1 of this chapter (Income Tax Regulations).
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Treas. Reg. §301.6037-2Required use of electronic form for returns of electing small business corporation
(a) Returns of electing small business corporation required electronically. (1) An electing small business corporation required to file an electing small business return on Form 1120-S, U.S. Income Tax Return for an S Corporation, under § 1.6037-1 of this chapter must file its Form 1120-S electronically if the small business corporation is required by the Internal Revenue Code and regulations to file at least 10 returns during the calendar year.
(2) The Commissioner may direct the type of electronic filing and may also exempt certain returns from the electronic requirements of this section through revenue procedures, publications, forms, instructions, or other guidance, including postings on the IRS.gov website. Returns filed electronically must be made in accordance with the applicable revenue procedures, publications, forms, instructions, or other guidance.
(b) Exclusions from electronic-filing requirements—(1) Waivers. The Commissioner may grant waivers of the requirements of this section in cases of undue hardship. One principal factor in determining hardship will be the amount, if any, by which the cost of filing the return electronically in accordance with this section exceeds the cost of filing the return on paper. A request for a waiver must be made in accordance with applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website. The waiver request will specify the type of filing (that is, a return required under section 6037) and the period to which it applies.
(2) Exemptions. The Commissioner may provide exemptions from the requirements of this section to promote effective and efficient tax administration. An exemption will be allowed for filers for whom using the technology required to file in electronic form conflicts with their religious beliefs. A submission claiming an exemption must be made in accordance with applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website.
(3) Additional Exclusion. If the IRS's systems do not support electronic filing, taxpayers will not be required to file electronically.
(c) Failure to file. If an electing small business corporation fails to file a return on magnetic media when required to do so by this section, the corporation is deemed to have failed to file the return. (See section 6651 for the addition to tax for failure to file a return.) In determining whether there is reasonable cause for failure to file the return, § 301.6651-1(c) and rules similar to the rules in § 301.6724-1(c)(3) (undue economic hardship related to filing information returns on magnetic media) will apply.
(d) Meaning of terms. The following definitions apply for purposes of this section:
(1) Magnetic media or electronic form. The terms magnetic media or electronic form mean any media or form permitted under applicable regulations, revenue procedures, or publications. These generally include electronic filing, as well as magnetic tape, tape cartridge, diskette, and other media specifically permitted under the applicable regulations, procedures, publications, forms, instructions, or other guidance.
(2) Corporation. The term corporation means a corporation as defined in section 7701(a)(3).
(3) Electing small business corporation return. The term electing small business corporation return means a Form 1120S, “U.S. Income Tax Return for an S Corporation,” along with all other related forms, schedules, and statements that are required to be attached to the Form 1120S, and all members of the Form 1120S series of returns, including amended and superseding returns.
(4) Electing small business corporation. The term electing small business corporation means an S corporation as defined in section 1361(a)(1).
(5) Calculating the number of returns. For purposes of this section, a corporation is required to file at least 10 returns if, during the calendar year ending with or within the corporation's taxable year, the corporation is required to file at least 10 returns of any type, including income tax returns, employment tax returns, excise tax returns, and information returns (for example, Forms W-2, Forms 1099, but not including schedules required to be attached to an S corporation return). In the case of a short-period return, a corporation is required to file at least 10 returns if, during the calendar year in which the corporation's short taxable year ends, the corporation is required to file at least 10 returns of any type, including information returns (for example, Forms W-2, Forms 1099, but not including schedules required to be attached to an S corporation return), income tax returns, employment tax returns, and excise tax returns.
(e) Example. The following example illustrates the provisions of this section. In the example, the corporation is a calendar-year taxpayer.
(1) In 2023, Corporation S, an electing small business corporation, is required to file one 2022 Form 1120-S, U.S. Income Tax Return for an S Corporation, two Forms W-2, Wage and Tax Statement, two Forms 1099-DIV, Dividends and Distributions, one Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, and four Forms 941, Employer's Quarterly Federal Tax Return. Because S is required to file 10 returns during the calendar year 2023, S is required to file its 2023 Form 1120-S electronically.
(2) [Reserved]
(f) Applicability date. The rules of this section apply to electing small business corporation returns required to be filed during calendar years beginning after December 31, 2023.
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Treas. Reg. §301.6037-2(a)Returns of electing small business corporation required electronically.
Returns of electing small business corporation required electronically. (1) An electing small business corporation required to file an electing small business return on Form 1120-S, U.S. Income Tax Return for an S Corporation, under § 1.6037-1 of this chapter must file its Form 1120-S electronically if the small business corporation is required by the Internal Revenue Code and regulations to file at least 10 returns during the calendar year.
(2) The Commissioner may direct the type of electronic filing and may also exempt certain returns from the electronic requirements of this section through revenue procedures, publications, forms, instructions, or other guidance, including postings on the IRS.gov website. Returns filed electronically must be made in accordance with the applicable revenue procedures, publications, forms, instructions, or other guidance.
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Treas. Reg. §301.6037-2(b)Exclusions from electronic-filing requirements—(1) Waivers.
Exclusions from electronic-filing requirements—(1) Waivers. The Commissioner may grant waivers of the requirements of this section in cases of undue hardship. One principal factor in determining hardship will be the amount, if any, by which the cost of filing the return electronically in accordance with this section exceeds the cost of filing the return on paper. A request for a waiver must be made in accordance with applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website. The waiver request will specify the type of filing (that is, a return required under section 6037) and the period to which it applies.
(2) Exemptions. The Commissioner may provide exemptions from the requirements of this section to promote effective and efficient tax administration. An exemption will be allowed for filers for whom using the technology required to file in electronic form conflicts with their religious beliefs. A submission claiming an exemption must be made in accordance with applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website.
(3) Additional Exclusion. If the IRS's systems do not support electronic filing, taxpayers will not be required to file electronically.
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Treas. Reg. §301.6037-2(c)Failure to file.
Failure to file. If an electing small business corporation fails to file a return on magnetic media when required to do so by this section, the corporation is deemed to have failed to file the return. (See section 6651 for the addition to tax for failure to file a return.) In determining whether there is reasonable cause for failure to file the return, § 301.6651-1(c) and rules similar to the rules in § 301.6724-1(c)(3) (undue economic hardship related to filing information returns on magnetic media) will apply.
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Treas. Reg. §301.6037-2(d)Meaning of terms.
Meaning of terms. The following definitions apply for purposes of this section:
(1) Magnetic media or electronic form. The terms magnetic media or electronic form mean any media or form permitted under applicable regulations, revenue procedures, or publications. These generally include electronic filing, as well as magnetic tape, tape cartridge, diskette, and other media specifically permitted under the applicable regulations, procedures, publications, forms, instructions, or other guidance.
(2) Corporation. The term corporation means a corporation as defined in section 7701(a)(3).
(3) Electing small business corporation return. The term electing small business corporation return means a Form 1120S, “U.S. Income Tax Return for an S Corporation,” along with all other related forms, schedules, and statements that are required to be attached to the Form 1120S, and all members of the Form 1120S series of returns, including amended and superseding returns.
(4) Electing small business corporation. The term electing small business corporation means an S corporation as defined in section 1361(a)(1).
(5) Calculating the number of returns. For purposes of this section, a corporation is required to file at least 10 returns if, during the calendar year ending with or within the corporation's taxable year, the corporation is required to file at least 10 returns of any type, including income tax returns, employment tax returns, excise tax returns, and information returns (for example, Forms W-2, Forms 1099, but not including schedules required to be attached to an S corporation return). In the case of a short-period return, a corporation is required to file at least 10 returns if, during the calendar year in which the corporation's short taxable year ends, the corporation is required to file at least 10 returns of any type, including information returns (for example, Forms W-2, Forms 1099, but not including schedules required to be attached to an S corporation return), income tax returns, employment tax returns, and excise tax returns.
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Treas. Reg. §301.6037-2(e)Example.
Example. The following example illustrates the provisions of this section. In the example, the corporation is a calendar-year taxpayer.
(1) In 2023, Corporation S, an electing small business corporation, is required to file one 2022 Form 1120-S, U.S. Income Tax Return for an S Corporation, two Forms W-2, Wage and Tax Statement, two Forms 1099-DIV, Dividends and Distributions, one Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, and four Forms 941, Employer's Quarterly Federal Tax Return. Because S is required to file 10 returns during the calendar year 2023, S is required to file its 2023 Form 1120-S electronically.
(2) [Reserved]
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Treas. Reg. §301.6037-2(f)Applicability date.
Applicability date. The rules of this section apply to electing small business corporation returns required to be filed during calendar years beginning after December 31, 2023.
21 Citing Cases
LL stopped filing these Forms 1120S, U.S. Income Tax Return for an S Corporation, as soon as he became CFO. He also stopped sending Schedules K–1, Shareholder’s Share of Income, Deductions, Credits, etc., to Maggard.5 By 2012 Maggard had caught on to LL and WJ. He hired a CPA and asked him to reconcile Schricker’s accounts. They discovered
When Ashand was incorporated in 2000, Velappan and Karen each owned 100 shares of the business. We know this because we have Ashand’s list of shareholders, which was memorialized in its first board meeting and in its articles of incorporation. Karen also says she herself remembers going to a Manhattan attorney’s office in 2000 to sign the c
- 3 - [*3] The firm had a rough start, and Ward began to struggle financially. She was able to get some of her debt discharged in 2012 and 2013. Midland Funding discharged about $7,000 of debt in 2012, and FIA Card Services NA discharged another $11,000 of debt in 2013. When it comes time for an S corporation to report its activities, i
- 3 - [*3] The firm had a rough start, and Ward began to struggle financially. She was able to get some of her debt discharged in 2012 and 2013. Midland Funding discharged about $7,000 of debt in 2012, and FIA Card Services NA discharged another $11,000 of debt in 2013. When it comes time for an S corporation to report its activities, i
Rather, the filing ofForm 1120S is required under the authority ofsection 6037, which is in part III ("Information Returns") ofsubchapter A ofchapter 61.
Unless otherwise stated, all section references are to the Internal Revenue Code of 1986, as amended and in effect for the years in issue, and all Rule references are to the Tax Court Rules ofPractice and Procedure. - 8 - [*8] For 2010 FWP reported gross receipts or sales of$289,201, total expenses of$141,559, and ordinary business inco
-10- supplies are "actually used or consumed." Congress's target was taxpayers primarily motivated by a desire to shelter income--notthose motivated by profit. Id. at 58, reprinted in 1976 U.S.C.C.A.N. at 3494. Indeed, the Senate hoped the changes would "improve the competitive position offull time farmers." Id. Both parties agree that
As an S corporation petitioner is required to make an annual return pursuant to section 6037.2 Petitioner's returns for 2002 through 2012, specifically ¹ Unless otherwise indicated, all subsequent section references are to the Internal Revenue Code (Code) in effect for 2010, the taxable year in issue.
But unlike the majority I would take an additional step to ensure that this general power isn't subject to a specific exception tucked into section 6037(c) .
First, they say that section 6037 lets the Commissioner choose either to issue a notice of deficiency or to summarily assess.
A corporation makes an election for a taxable year under this paragraph (f) by attaching a statement to a timely filed original or amended return required to be filed under section 6037 for that taxable year.