Extension of Time for Payment of Taxes by a

Corporation Expecting a Net Operating Loss Carryback

Form 1138

OMB No. 1545-0135 (Rev. December 2005)

Department of the Treasury

Internal Revenue Service (Under Section 6164 of the Internal Revenue Code)

Name Employer identification number

Number, street, and room or suite no. If a P.O. box, see instructions.

City or town, state, and ZIP code

1 Ending date of the tax year of the expected net operating loss (NOL) 2 Amount of expected NOL

$

3 Reduction of previously determined tax attributable to the expected NOL carryback

(see instructions—attach schedule) 

4 Ending date of the tax year immediately preceding the tax year of the expected NOL

5 Give the reasons, facts, and circumstances that cause the corporation to expect an NOL.

Amount for which payment is to be extended:

a Enter the total tax shown on the return, plus any amount assessed as a deficiency, interest, or

penalty (see instructions) 6a

b Enter amounts from line 6a that were already paid or were required to have been paid, plus refunds,

credits, and abatements (see instructions) 6b

Subtract line 6b from line 6a. Do not enter more than the amount on line 3 above. This is the amount

of tax for which the time for payment is extended

c

6c

Sign

Here

Under penalties of perjury, I declare that I have examined this form, including any accompanying schedules and statements, and

to the best of my knowledge and belief it is true, correct, and complete.

Signature of officer Date Title

For Paperwork Reduction Act Notice, see instructions. Cat. No. 17250W Form 1138 (Rev. 12-2005)

$

Keep a copy of

this form for

your records.

  

6
Form 1138 (Rev. 12-2005) Page 2

General Instructions

Section references are to the Internal Revenue Code.

Paperwork Reduction Act Notice. 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.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated average

time is:

Recordkeeping 3 hr., 21 min.

Termination of extension. The IRS can terminate the extension

if it believes that any part of the form contains erroneous or

unreasonable information. The IRS can also terminate the

extension if it believes it may not be able to collect the tax.

Learning about the law or the form 42 min.

Preparing and sending the form to the IRS 47 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 Internal

Revenue Service, Tax Products Coordinating Committee,

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406,

Washington, DC 20224. Do not send Form 1138 to this office.

Instead, see When and where to file, above.

Period of extension. In general, the extension for paying the tax

expires at the end of the month in which the return for the tax year

of the expected NOL is required to be filed (including extensions).

The corporation can further extend the time for payment by

filing Form 1139, Corporation Application for Tentative Refund,

before the period of extension ends. See the instructions for Form

1139. The period will be further extended until the date the IRS

informs the corporation that it has allowed or disallowed the

application in whole or in part.

Purpose of form. A corporation that expects a net operating

loss (NOL) in the current tax year can file Form 1138 to extend

the time for payment of tax for the immediately preceding tax

year. This includes extending the time for payment of a tax

deficiency. The payment of tax that can be postponed cannot

exceed the expected overpayment from the carryback of the

NOL.

Interest. Interest is charged on postponed amounts from the

dates that the payments would normally be due. The interest is

figured at the underpayment rate specified in section 6621.

Only payments of tax that are required to be paid after the

filing of Form 1138 are eligible for extension. Do not file this form

if all the required payments have been paid or were required to

have been paid.

Specific Instructions

Line 3. Enter the reduction of previously determined tax

attributable to the carryback, for tax years before the tax year of

the NOL. Previously determined tax is generally:

See section 1314(a).

If the corporation previously filed Form 1138 and later finds

information that will change the amount of the expected NOL,

the corporation can file a revised Form 1138. If the amount of

the NOL is increased based on the new information, the

corporation can postpone the payment of a larger amount of tax

as long as the larger amount has not yet been paid or is not yet

required to be paid. If the amount of the NOL is reduced

because of the new information, the corporation must pay the

tax to the extent that the amount of tax postponed on the

original filing exceeds the amount of tax postponed on the

revised filing.

Line 6a. For the year shown on line 4, enter on line 6a the total of:

1. The total tax shown on the return, plus

2. Any amount assessed as a deficiency (or as interest or a

penalty) prior to the filing of this Form 1138.

Line 6b. Enter the total of the following:

When and where to file. File Form 1138 after the start of the

tax year of the expected NOL but before the tax of the

preceding tax year is required to be paid. Generally, file Form

1138 with the Internal Revenue Service Center where the

corporation files its income tax return.

1. The amount of tax paid or required to be paid before the

date this form is filed. This includes any amount assessed as a

deficiency or as interest or a penalty if this form is filed more than

21 calendar days after notice and demand for payment was made

(more than 10 business days if the amount for which the notice

and demand for payment was made equals or exceeds $100,000).

An amount of tax for which the corporation has received an

extension of time to pay (under section 6161) is not considered

required to be paid before the end of the extension, plus

2. The amount of refunds, credits, and abatements made

before the date this form is filed.

Address. 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 corporation has a P.O. box, show the box

number instead.

A corporation can file Form 1138 separately or with Form

7004, Application for Automatic 6-Month Extension of Time To

File Certain Business Income Tax, Information, and Other

Returns. If Form 1138 and Form 7004 are filed together, Form

1138 will reduce or eliminate the amount of tax to be deposited

when Form 7004 is filed. If Form 1138 is filed with Form 7004,

then file Form 1138 with the Internal Revenue Service Center at

the applicable address where the corporation files Form 7004.

Line 2. The amount of the expected NOL must be based on all of

the facts relating to the operation of the corporation. Consider the

following items when estimating the amount of the expected NOL:

1. The number and dollar amounts of the corporation’s

Government contracts that have been canceled,

2. Profit and loss statements, and

3. Other factors peculiar to the corporation’s operations.

See section 172, Pub. 542, Corporations, and Pub. 536, Net

Operating Losses for Individuals, Estates, and Trusts, to help

determine the amount of the expected NOL. Limitations apply to

(a) the amount of taxable income of a new loss corporation for any

tax year ending after an ownership change that may be offset by

any pre-change NOLs and (b) the use of preacquisition losses of

one corporation to offset recognized built-in gains of another

corporation. See sections 382 and 384 for details.

If your address is outside the United States or its possessions

or territories, fill in the line for “City or town, state, and ZIP code”

in the following order: city, province or state, and country. Follow

the foreign country’s practice for entering the postal code, if any.

Do not abbreviate the country name.

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.

If the corporation receives its mail in care of a third party (such

as an accountant or attorney), enter on the street address line

“C/O” followed by the third party’s name and street address or

P.O. box.

1. The amount shown on the return, plus any amounts

assessed as deficiencies before Form 1138 is filed, minus

2. Any abatements, credits, or refunds allowed or made before

Form 1138 is filed.

Printed on Recycled Paper

Attach a schedule showing how the reduction was figured.

See the instructions for the corporate income tax return for

information on figuring the NOL deduction and recomputing the

tax.