Extension of Time for Payment of Taxes by a

Corporation Expecting a Net Operating Loss Carryback

Form 1138

OMB No. 1545-0135 (Rev. February 1998)

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.

Attach a schedule. See instructions ©

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 on back. Cat. No. 17250W Form 1138 (Rev. 2-98)

$

Keep a copy of

this form for

your records.

© © ©

6
Form 1138 (Rev. 2-98) 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 may terminate the extension

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

unreasonable information. The IRS may 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 Tax Forms

Committee, Western Area Distribution Center, Rancho Cordova,

CA 95743-0001. 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 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 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 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. The payment of tax that may 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. 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 NOL deduction and recomputing the

tax.

If the corporation previously filed Form 1138 and later finds

information that will change the amount of the expected NOL,

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

the NOL 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 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 the following:

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.

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 of the street address.

Additional Information. A corporation may file Form 1138

separately or with Form 7004, Application for Automatic

Extension of Time To File Corporation Income Tax Return. 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.

File Form 1138 with the Internal Revenue Service Center

where the corporation files its income tax return.

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 and Pub. 536, Net Operating Losses, 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.