rom 1138 Extension of Time for Payment of Taxes by a
(Rex. September i989) | COrporation Expecting a Net Operating Loss Carryback| 2¥e's 70%

Departr it of the Tr
Internal Revenue Service. (Under Section 6164 of the Internal Revenue Code)

Name Employer identification number

Number and street

City or town, state, and ZIP code

1 Tax year of expected net operating loss: Tax year ended 2 Amount of expected net operating loss
$
3 Reduction of previously determined tax attributable to the expected net operating loss carryback.
Attach a schedule. (See instructions.)
4 Tax year immediately preceding the tax year of the expected net operating loss: Tax year ended

5 Give the reasons, facts, and circumstances that cause the corporation to expect a net operating loss.

Computation of Amount for Which Payment Is To Be Extended:

6a Enter the total tax shown on the return, plus any é amount assessed as a a deficiency, i interest, or penalty.
(See instructions.)

b Enter amounts from line 6a that were aeady paid or were eared to have been ald, (Plus refunds, 6b
credits, and abatements

6a

¢ Subtract the amount on line 6b from the amount on line 6a and enter the result here. Do not enter more
than the amount entered on line 3. This is the amount of tax the time for payment of which is being
extended... oa 6c

~ Signature

Under penalties of perjury, | declare that | 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 Title Date

For Paperwork Reduction Act Notice, see instructions on back of form. Form 1138 (Rev. 9-89)


Form 1138 (Rev 9-89)

Page 2

General Instructions
(Section references are to the Internal Revenue Code.)

Paperwork Reduction Act Notice.—We ask for this information
to carry out the Internal Revenue laws of the United States. We
need it to ensure that taxpayers are complying with these laws
and to allow us to figure and collect the right amount of tax. You
are required to give us this information.

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

Recordkeeping 3hrs. 21 min.
Learning about the law or the form 35 min.
Preparing and sending the form to IRS 41min.

If you have comments concerning the accuracy of these time
estimates or suggestions for making the form more simple, we
would be happy to hear from you. You can write to the Internal
Revenue Service, Washington, DC 20224, Attention: IRS Reports
Clearance Officer T:FP. or the Office of Management and
Budget, Paperwork Reduction Project (1545-0135),
Washington, DC 20503.

A. Purpose of Form.—A corporation that expects a net operating
loss in the current tax year may 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

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

Form 1138 may be filed alone or with Form 7004, Application
for Automatic Extension of Time To File Corporation Income Tax
Return. When Form 1138 is filed with Form 7004, it is used to
reduce the amount of tax to be deposited with Form 7004. In
either case the payment of tax that may be postponed cannot
exceed the expected overpayment from the carryback of the net
operating loss. See Rev. Rul. 82-47 1982-1. C.B. 201 for other
details.

If a corporation has previously filed Form 1138 and later finds
information that will change the amount of the expected net
operating loss, the corporation may file a revised Form 1138. If
the amount of the net operating loss is increased based on the
new information, the corporation may postpone the payment of a
larger amount of tax as long as the larger amount of tax has not
yet been paid or is not yet required to be paid. If the amount of the
net operating loss is decreased 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.

B. Where To File. —File this form with the Internal Revenue
Service Center where the corporation is required to file its income
tax return

C. Time For Filing. —File this form after the start of the tax year
of the expected net operating loss but before the tax for the
preceding year is required to be paid.

D. Amount of Expected Net Operating Loss.—The estimated
loss must be based upon all the facts relating to the operations of
the corporation. Consider the following items when estimating the
amount of the net operating loss: number and dollar amounts of
the corporation's Government contracts that have been cancelled;
profit and loss statements; and other factors peculiar to the
corporation's operations. The corporation is responsible for the
accuracy of the estimate.

See section 172 and the instructions for the applicable income
tax return that the corporation files to help determine the amount
of net operating loss. Also, see section 382 for a limitation on the
amount of a net operating loss when there has been a change in
ownership of the corporation.

E. Termination of Extension.—IRS may terminate the extension
if it believes that any part of the form contains erroneous or
unreasonable information. IRS may also terminate the extension if
it believes it may not be able to collect the tax.

F. 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 net operating loss is required to be filed
(including extensions).

The corporation may further extend the time for payment by
filing Form 1139, Corporation Application for Tentative Refund,
before the period of extension ends. The period will be further
extended until the date IRS informs the corporation that it has
allowed or disallowed the application.

G. Interest.—Interest is charged on postponed amounts from the
dates on which the payments would normally be due. The interest
charge is at the rate specified in section 6621

Specific Instructions

Line 3.—Enter the reduction of previously determined tax
attributable to the carryback, for tax years before the tax year of
the net operating loss. Figure the previously determined tax
according to section 1314(a). This is generally the amount shown
on the return, plus any amounts assessed as deficiencies before
Form 1138 is filed minus any abatements, credits, or refunds
allowed or made before Form 1138 is filed.

Attach a schedule showing how the reduction was figured. See
the instructions for the corporate income tax return for
information on figuring the net operating loss deduction and
recomputing the tax.

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

(1) the total tax shown on the return, plus

(2) any amount assessed as a deficiency prior to the filing of this
Form 1138. (A deficiency exists if it is not paid within ten days of
the filing of a notice and demand for payment).

Line 6b.—Enter the total of the following:

(1) The amount of tax paid or required to be paid before the date
this form Is filed. This includes any late installment. 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.

(2) The amount of refunds, credits, and abatements made before
the date of filing this form.

U.S. Government Printang Office: 1989-262-151/80159