2003 HTML Instructions for Form 1120-ND,

This is archived information that pertains only to the 2003 Tax Year. If you
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General Instructions

Purpose of Form

Nuclear decommissioning funds use Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons, to report contributions received, income earned, the administrative expenses of operating the fund, and the tax on modified gross income. If there are initial taxes on self-dealing with the fund, the return is also used to report and pay the section 4951 taxes on self-dealing.

Who Must File

All section 468A nuclear decommissioning funds must file Form 1120-ND. A disqualified person engaging in self-dealing must file Form 1120-ND to report the initial tax under section 4951.

Initial taxes on self-dealing. A disqualified person or a trustee who participates in an act of self-dealing must file Form 1120-ND. See the instructions on page 3 for computing the amount of tax for trustees and disqualified persons.

Complete the following items if you are computing tax due to acts of self-dealing:

The heading (omitting the checkboxes for final return, name change, address change, and amended return);
The signature and, if applicable, the paid preparer's section;
Item 5, Schedule M, Other Information; and
The appropriate lines in Part II, Sections A and B.

Each person liable for filing a return to pay any tax reportable on this form must file a separate return.

When To File

Generally, a fund must file its income tax return by the 15th day of the 3rd month after the end of its tax year. The return of a trustee or self-dealer who owes tax under section 4951 must be filed by the 15th day of the 3rd month after the end of the tax year of the trustee or self-dealer.

If the due date falls on a Saturday, Sunday, or legal holiday, the fund may file on the next business day.

Where To File

File the fund's or disqualified person's or trustee's return at the applicable IRS address listed below.

If the fund's principal business, office, or agency is located in:	And the total assets at the end of the tax year (Form 1120-ND, Schedule L, line 6, column (b)) are:	Use the following Internal Revenue Service Center address:
Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia, Wisconsin	Less than $10 million $10 million or more	Cincinnati, OH 45999-0012 Ogden, UT 84201-0012
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, Wyoming	Any amount	Ogden, UT 84201-0012

Private delivery services. Funds can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. The most recent list of designated private delivery services was published by the IRS in September 2002.

The list includes only the following:

Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service.
DHL Worldwide Express (DHL): DHL “Same Day” Service and DHL USA Overnight.
Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.
United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.

Extension. File Form 7004, to request a 6-month extension of time to file.

A self-dealer or trustee filing to report section 4951 taxes must file Form 2758, Application for Extension of Time To File Certain Excise, Income, Information, and Other Returns, to request an extension of time to file.

An extension of time to file does not extend the time for payment of tax.

Electing taxpayer. The term “electing taxpayer” means an eligible taxpayer that elects the application of section 468A under the rules contained in Regulations section 1.468A-7.

Also, report acts of self-dealing based on the tax year of the self-dealer. See Rev. Rul. 75-391, 1975-2 C.B. 446, for details.

Who Must Sign

The return must be signed and dated by an authorized trustee. The return of any person who engaged in any act of self-dealing must be signed and dated by that person or the individual authorized to sign on behalf of that person.

If an employee of the fund completes Form 1120-ND, the paid preparer's space should remain blank. Anyone who prepares Form 1120-ND but does not charge the fund should not complete that section. Generally, anyone who is paid to prepare the return must sign it and fill in the “Paid Preparer's Use Only” area.

The paid preparer must complete the required preparer information and—

Sign the return in the space provided for the preparer's signature.
Give a copy of the return to the taxpayer.

Paid Preparer Authorization

If the fund wants to allow the IRS to discuss its tax return with the paid preparer who signed it, check the “Yes” box in the signature area of the return. This authorization applies only to the individual whose signature appears in the “Paid Preparer's Use Only” section of the fund's return. It does not apply to the firm, if any, shown in that section.

If the “Yes” box is checked, the fund is authorizing the IRS to call the paid preparer to answer any questions that may arise during the processing of its return. The fund is also authorizing the paid preparer to:

Give the IRS any information that is missing from the return,
Call the IRS for information about the processing of the return or the status of any related refund or payment(s), and
Respond to certain IRS notices that the fund has shared with the preparer about math errors, offsets, and return preparation. The notices will not be sent to the preparer.

The fund is not authorizing the paid preparer to receive any refund check, bind the fund to anything (including any additional tax liability), or otherwise represent the fund before the IRS. If the fund wants to expand the paid preparer's authorization, see Pub. 947, Practice Before the IRS and Power of Attorney.

The authorization cannot be revoked. However, the authorization will automatically end no later than the due date (excluding extensions) for filing the fund's tax return for the following year.

Assembling the Return

To ensure that the fund's tax return is correctly processed, attach all schedules after page 2, Form 1120-ND, in alphabetical order followed by other forms in numerical order.

Complete every applicable entry space on Form 1120-ND. Do not write “See Attached” instead of completing the entry spaces. If more space is needed on the forms or schedules, attach separate sheets using the same size and format as the printed forms. If there are supporting statements and attachments, arrange them in the same order as the schedules or forms they support and attach them last. Show the totals on the printed forms. Also, be sure to enter the fund's name and EIN on each supporting statement or attachment.

Accounting Method

The fund must use the same method of accounting as the electing taxpayer.

Rounding Off to Whole Dollars

The fund may round off cents to whole dollars on its return and schedules. If the fund does round to whole dollars, it must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar (for example, $1.39 becomes $1 and $2.50 becomes $3).

If two or more amounts must be added to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Recordkeeping

Keep the fund's records for as long as they may be needed for the administration of any provision of the Internal Revenue Code. Usually, records that support an item of income, deduction, or credit on the return must be kept for 3 years from the date the return is due or filed, whichever is later. Keep records that verify the fund's basis in property for as long as they are needed to figure the basis of the original or replacement property.

The fund should keep copies of all filed returns. They help in preparing future and amended returns.

Depository Method of Tax Payment

The fund must pay the tax due in full no later than the 15th day of the 3rd month after the end of the tax year. The two methods of depositing fund income taxes are discussed below.

Electronic Deposit Requirement

The fund must make electronic deposits of all depository taxes (such as employment tax, excise tax, and fund income tax) after December 31 of the calendar year following any calendar year in which the fund deposited more than $200,000 of such taxes. Once the fund is required to use the Electronic Federal Tax Payment System (EFTPS), it must continue to use EFTPS in all later years.

If the fund is required to use EFTPS and fails to do so, it may be subject to a 10% penalty. If the fund is not required to use EFTPS, it may participate voluntarily. To enroll in or get more information about EFTPS, call 1-800-555-4477 or 1-800-945-8400. To enroll online, visit www.eftps.gov.

Depositing on time. For EFTPS deposits to be made timely, the fund must initiate the transaction at least 1 business day before the date the deposit is due.

Deposits With Form 8109

If the fund does not use EFTPS, deposit fund income tax payments (and estimated tax payments) with Form 8109, Federal Tax Deposit Coupon. If you do not have a preprinted Form 8109, use Form 8109-B to make deposits. You can get this form by calling 1-800-829-4933. Be sure to have your EIN ready when you call.

Do not send deposits directly to an IRS office; otherwise, the fund may have to pay a penalty. Mail or deliver the completed Form 8109 with the payment to an authorized depository (i.e., a commercial bank or other financial institution authorized to accept Federal tax deposits). Make checks or money orders payable to that depositary.

If the fund prefers, it may mail the coupon and payment to: Financial Agent, Federal Tax Deposit Processing, P.O. Box 970030, St. Louis, MO 63197. Make the check or money order payable to “Financial Agent.”

To help ensure proper crediting, write the fund's EIN, the tax period to which the deposit applies, and “Form 1120-ND” on the check or money order. Be sure to darken the “1120” box on the coupon. Records of these deposits will be sent to the IRS.

For more information on deposits, see the instructions in the coupon booklet (Form 8109) and Pub. 583, Starting a Business and Keeping Records.

If the fund owes tax when it files Form 1120-ND, do not include the payment with the tax return. Instead, mail or deliver the payment with Form 8109 to an authorized depositary, or use EFTPS, if applicable.

Estimated Tax Payments

Generally, the following rules apply to the fund's payments of estimated tax.

The fund must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more.
The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next regular business day.
Figure the fund's expected modified gross income for the tax year. Then multiply the fund's expected modified gross income by 20% and use Form 1120-W, Estimated Tax for Corporations, as a worksheet to compute estimated tax.
If the fund does not use EFTPS, use the deposit coupons (Forms 8109) to make deposits of estimated tax.

For more information on estimated tax payments, including penalties that apply if the fund fails to make required payments, see the instructions for line 15 on page 3.

Overpaid estimated tax. If the fund overpaid estimated tax, it may be able to get a quick refund by filing Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax. The overpayment must be at least 10% of the fund's expected income tax liability and at least $500. File Form 4466 after the end of the fund's tax year, and no later than the 15th day of the third month after the end of the tax year. Form 4466 must be filed before the fund files its tax return.

Interest and Penalties

Interest. Interest is charged on taxes paid late even if an extension of time to file is granted. Interest is also charged on penalties imposed for failure to file, negligence, fraud, substantial valuation misstatements, and substantial understatements of tax from the due date (including extensions) to the date of payment. The interest charge is figured at a rate determined under section 6621.

Penalty for late filing of return. A fund that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $100. The penalty will not be imposed if the fund can show that the failure to file on time was due to reasonable cause. Funds that file late must attach a statement explaining the reasonable cause.

Penalty for late payment of tax. A fund that does not pay the tax when due generally may be penalized ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. The penalty will not be imposed if the fund can show that the failure to pay was due to reasonable cause.

Other penalties. Other penalties can be imposed for negligence, substantial understatement of tax, and fraud. See sections 6662 and 6663.

Specific Instructions

Period Covered

Enter the tax year in the space provided at the top of the form. For a calendar year, enter the last two digits of the calendar year in the first entry space. For a fiscal tax year return, fill in the tax year space at the top of the form.

Name and Address

The fund name must be entered on every Form 1120-ND. If this return is filed to report the income, deductions, and income tax liability of the fund, enter the name and address of the fund in the address section.

If the return is filed by a trustee or disqualified person to report section 4951 taxes, enter that person's name and address in the address section.

Include the suite, room, or other unit number after the street address. If the Post Office does not deliver mail to the street address and the fund, trustee, or disqualified person has a P.O. box, show the box number instead.

Item A—Employer Identification Number (EIN)

Enter the fund's EIN. If the fund does not have an EIN, it must apply for one. An EIN may be applied for:

Online—Click on the EIN link at www.irs.gov/businesses/small. The EIN is issued immediately once the application information is validated.
By telephone at 1-800-829-4933 from 7:30 a.m. to 5:30 p.m. in the fund's local time zone.
By mailing or faxing Form SS-4, Application for Employer Identification Number.

If the fund has not received its EIN by the time the return is due, write “Applied for” in the space for the EIN. For more details, see Pub. 583.

Item B—Identifying Number of Trustee or Disqualified Person

If the return is filed by a trustee or disqualified person to report section 4951 taxes, enter the identifying number of the trustee or disqualified person. For an individual trustee or disqualified person, enter the individual's social security number. If the trustee or disqualified person is not an individual, enter the EIN. Do not complete item B if Form 1120-ND is filed to report the income, deductions, and income tax liability of the fund.

Item C—Fund, Trustee, or Disqualified Person

Check only the box that applies.

When filed to report the income, deductions, and income tax liability of the fund, check the “Fund” box.
When filed by a trustee who is liable for taxes under section 4951, check the “Trustee” box.
When filed by a disqualified person who is liable for section 4951 tax, check the “Disqualified person” box.

Item D—Final Return, Name Change, Address Change, or Amended Return

Indicate a final return, name change, address change, or amended return by checking the appropriate box.

Note.

If a change in address occurs after the return is filed, use Form 8822, Change of Address, to notify the IRS of the new address.

Part I. Computation of Fund Income Tax

Income

Line 1. Taxable interest. Enter the total taxable interest income received or accrued for the year, including any original issue discount. Do not include tax-exempt interest on line 1; but report it as an item of information on Schedule M, line 2e.

Line 2. Capital gain net income. Every sale, exchange, or actual or deemed distribution of assets held by the fund must be reported in detail on Schedule D (Form 1120), Capital Gains and Losses, even if there is no gain or loss. The amount realized on an actual or deemed distribution is the fair market value of the assets as of the date of distribution.

Line 3. Other income. Enter any other taxable income not reported on line 1 or line 2 and explain its nature on an attached schedule. If the fund had only one item of other income, describe it in parentheses on line 3.

Deductions

Note.

A deduction is not allowed for certain expenses allocable to tax-exempt income. See section 265. In addition, a deduction is not allowed for distributions made to electing taxpayers. Report such payments as an item of information on Schedule M, line 2d. Liabilities are not treated as incurred prior to the time economic performance takes place. See section 461(h).

Line 5. Trustee fees. Enter the total deductible fees paid or incurred to the trustee(s) for administering the fund during the tax year.

Line 6. Taxes. Enter deductible taxes paid or incurred during the tax year, including state and local income taxes. Do not deduct Federal income taxes or taxes not imposed on the fund.

Line 8. Other deductions. Attach a schedule listing by type and amount all allowable deductions that are not deducted elsewhere on Form 1120-ND. Include investment advisory fees, actuarial expenses, and other administrative expenses paid or incurred during the tax year, but do not include decommissioning costs.

Line 11. Net operating loss deduction. Enter the amount of any net operating loss deduction allowed by Regulations section 1.468A-4(b)(4), and explain its computation on an attached schedule.

Line 14. Payments. No payments are allowed other than those on lines 14a through 14d and the credit for backup withholding.

Backup withholding. If the fund had Federal income tax withheld from any payments it received because, for example, it failed to give the payer its correct EIN, include the amount withheld in the total for line 14f. Write the amount withheld and the words “Backup Withholding” in the blank space above line 14f.

Line 15. Estimated tax penalty. A fund that does not make estimated tax payments when due may be subject to an underpayment penalty for the period of underpayment. Generally, a fund is subject to the penalty if its tax liability is $500 or more, and it did not timely pay the smaller of:

Its current year tax liability or
Its prior year tax.

See section 6655 for details and exceptions, including special rules for large corporations.

Use Form 2220, Underpayment of Estimated Tax by Corporations, to see if the fund owes a penalty and to figure the amount of the penalty. Generally, the fund does not have to file this form because the IRS can figure the amount of any penalty and bill the fund for it. However, even if the fund does not owe the penalty, complete and attach Form 2220 if:

The annualized income or adjusted seasonal installment method is used or
The fund is a large corporation computing its first required installment based on the prior year's tax. (See the Instructions for Form 2220 for a definition of a large corporation.)

If Form 2220 is attached, check the box on line 15 and enter the amount of the penalty on that line.

Schedule L—Balance Sheets

The balance sheets should agree with the fund's books and records.

Part II. Initial Taxes on Self-Dealing (Section 4951)

Initial taxes on self-dealers.

An initial tax of 10% of the amount involved (defined on page 4) is imposed on each act of self-dealing between a disqualified person and a nuclear decommissioning fund for each tax year (or part of a tax year) in the taxable period. The tax is required to be paid by any disqualified person (other than a trustee acting only as a trustee of the trust) who participates in the act of self-dealing.

Initial taxes on trustee.

A tax of 2½% of the amount involved is imposed on a trustee who participates in the act of self-dealing. The tax is not imposed if the trustee unwillingly or due to reasonable cause participated in the act. The tax is computed on all acts of self-dealing that occur within the taxable period. The tax is required to be paid by the trustee who participates in the act.

Exceptions. The initial tax on the act of self-dealing of a disqualified person or a trustee is not imposed if the acts of self-dealing are corrected within the taxable period. The terms self-dealing, taxable period, amount involved, correction, correct, and disqualified person are defined below and on page 4.

Definitions

Self-dealing. When determining if an act is an act of self-dealing, treat the transfer of personal property by a disqualified person to the fund as a sale or exchange if the property is subject to a mortgage or similar lien. Otherwise, the term “self-dealing” means any direct or indirect:

Sale, exchange, or leasing of real or personal property between the fund and a disqualified person;
Lending of money or other extensions of credit between the fund and a disqualified person;
Furnishing of goods, services, or facilities between the fund and a disqualified person;
Payment of compensation (or payment or reimbursement of expenses) by the fund to a disqualified person; and
Transfers to, or use by or for the benefit of, a disqualified person of the income or assets of the fund.

Exceptions. Acts of self-dealing do not include:

The payment by the fund for the purposes of satisfying, in whole or in part, the liability of the electing taxpayer for decommissioning costs of the nuclear power plant.
The withdrawal of excess contributions by the electing taxpayer in accordance with Regulations section 1.468A-5(c)(2).
The withdrawal of amounts that have been treated as distributions to the electing taxpayer under Regulations section 1.468A-5(c)(3).
The payment of amounts remaining in the fund to the electing taxpayer after the termination of the fund upon the substantial completion of decommissioning.
The furnishing of goods, services, or facilities by a disqualified person to the fund if the furnishing is without charge and if the goods, services, or facilities so furnished are exclusively used for the purposes specified in section 468A(e)(4).
The payment of compensation (and the payment or reimbursement of expenses) by the fund to a disqualified person for personal services that are reasonable and necessary to carry out the purposes of the fund and the compensation (or payment or reimbursement of expenses) is not excessive.
A payment by the fund for the performance of trust functions and certain general banking services by a bank or trust company that is a disqualified person, if the banking services are reasonable and necessary to carry out the purposes of the fund and the compensation paid to the bank or trust company is not excessive (considering the fair market interest rate for the use of the funds by the bank or trust company).

The allowable general banking services are:

Checking accounts, as long as the bank does not charge interest on any overwithdrawals;
Savings accounts, as long as the fund may withdraw its money after giving no more than 30 days notice, without losing interest for the period the money was on deposit; and
Safekeeping activities (for example, rental of a safe deposit box).

Taxable period. For an act of self-dealing, the term “taxable period” means the period beginning on the date of the act of self-dealing and ending on the date of the earliest of—

The date of mailing of a notice of deficiency under section 6212 for the section 4951 tax,
The date on which the tax imposed by section 4951 is assessed, or
The date correction of the act of self-dealing is completed.

Amount involved. The term “amount involved” means the greater of the amount of money given (or received) and the fair market value of the other property given (or received). When services described in section 4951(d)(2)(C) are involved, the amount involved is only the excess compensation.

Note.

Fair market value is determined as of the date on which the act of self-dealing occurs and at the highest market value during the taxable period.

Correction and correct. The terms “correction” and “correct” mean the undoing of an act of self-dealing, to the extent possible, but in any case returning the fund to a financial position no worse than it would have been if the disqualified person acted under the highest fiduciary relationship.

Disqualified person. The term “disqualified person” means a person who is:

A contributor to the fund.
A trustee of the fund.
An owner of more than 10% of (a) the total combined voting power of a corporation, (b) the profits interest of a partnership, or (c) the beneficial interest of a trust or unincorporated business that is a contributor to the fund.
An officer, director, or employee of a person who is a contributor to the fund.
The spouse, ancestor, or a lineal descendant, or a spouse of a lineal descendant of an individual described in items 1 through 4 above.
A corporation of which persons described in items 1 through 5 above own more than 35% of the total combined voting power.
A partnership of which persons described in items 1 through 5 above own more than 35% of the profits interests.
A trust or estate of which persons described in items 1 through 5 above own more than 35% of the beneficial interest.

For purposes of items 3(a) and 6, indirect stockholders would be taken into account under section 267(c), except that, for purposes of this paragraph, section 267(c)(4) will be treated as providing that the members of the family of an individual are only those individuals described in item 5. For purposes of items 3(b), 3(c), 7, and 8, the ownership of profits or beneficial interests will be determined by the rules of constructive ownership of stock provided in section 267(c) (other than paragraph (3) thereof), except that section 267(c)(4) will be treated as providing that the members of the family of an individual are only those individuals described in item 5.

Dispositions of an Interest in a Nuclear Power Plant

There are Federal income tax consequences when there is a transfer of assets of a nuclear decommissioning fund in connection with the sale, exchange, or other disposition of a transferor of all or a portion of its qualifying interest in a nuclear power plant to another taxpayer (transferee). If the requirements of Regulations section 1.468A-6(b) are met, the Federal income tax consequences are the following:

No gain or loss. If there is a disposition of an interest (wholly or partially) in a nuclear power plant, neither the transferor or the transferee (or either's fund) will recognize gain, loss, or otherwise take any income or deduction into account because of the transfer of all or some of the assets of the transferor's fund. Also, the transfer is not considered a payment or contribution of assets by the transferor's fund (or by the transferee to its fund).
Basis. Transfers of assets of a fund to which Regulations section 1.468A-6 applies do not affect basis. The transferee's fund will have a basis in the assets received from the transferor equal to the transferor's basis in those assets immediately prior to the transfer.
Tax year of disposition.

A. Transferee. If a transferee does not file a request for a schedule of ruling amounts by the deemed payment deadline (21/ months after the end of the tax year of the disposition), the transferee's ruling amount for the interest acquired is determined by taking the amount contained in the transferor's current schedule of ruling amounts for that tax year and that plant multiplied by the product of:

(1) The portion of the transferor's qualifying interest that is transferred, and

(2) A fraction, the numerator of which is the number of days in the tax year of the transferor including and following the date of the disposition, and the denominator of which is the number of days in that tax year.

B.Transferor. If a transferor does not file a request for a revised schedule of ruling amounts on or before the deemed payment deadline for the tax year of the transferor in which the disposition of its interest in the nuclear power plant occurred (that is, the date that is 2½ months after the close of that tax year), the transferor's ruling amount with respect to that plant for that year will equal the sum of:

(1) The ruling amount contained in the transferor's current schedule of ruling amounts with respect to that plant for that tax year multiplied by the portion of qualifying interest that is retained, if any, and

(2) The ruling amount contained in the transferor's current schedule of ruling amounts with respect to that plant for that tax year multiplied by the product of:

(a) The portion of the transferor's qualifying interest that is disposed of and

(b) A fraction, the numerator of which is the number of days in the tax year that precede the date of the disposition, and the denominator of which is the number of days in that tax year.
Tax year after the year of disposition. A transferee of, or a transferor who retains, a qualifying interest in a nuclear power plant, must file a request for a revised schedule of ruling amounts for the interest by the deemed payment deadline (defined above). If the transferee (or the transferor) does not timely file such a request, the transferee's (or the transferor's) ruling amounts for the interest for that tax year will be zero.

For more information, see Regulations section 1.468A-6.

Privacy Act and Paperwork Reduction Act Notices.

We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

Section 4951 of the Internal Revenue Code requires disqualified taxpayers engaged in self-dealing with a trust to pay over to the IRS an initial tax. This form is used to report the initial amount of tax that you owe. Sections 6001 and 6011 require you to provide the requested information if the tax applies to you. Section 6109 and its regulations require you to provide your social security number or other identifying number. Routine uses of this information include disclosing it to the Department of Justice for civil and criminal litigation and to other federal agencies, as provided by law. We may disclose the information to cities, states, the District of Columbia, and U.S. Commonwealths or possessions to administer their tax laws. We may disclose the information to foreign governments pursuant to tax treaties. We may disclose the information to contractors for tax administration purposes. We may also disclose this information to Federal and state agencies to enforce Federal nontax criminal laws and to combat terrorism. If you do not provide this information, or you provide false or fraudulent information, you may be subject to interest, penalties, and/or criminal prosecution.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:

Recordkeeping	23 hr., 26 min.
Learning about the law or the form	3 hr., 7 min.
Preparing the form	5 hr., 30 min.
Copying, assembling, and sending the form to the IRS	32 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Tax Products Coordinating Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. Do not send the tax form to this address. Instead, see Where To File, on page 1.

Instructions for Form 1120-ND - Main Contents