What IRS Form 1120-L (2017) Is For

IRS Form 1120-L (2017) is the federal income tax return that life insurance companies use to report their income, deductions, and credits for the tax year. Every domestic life insurance company and certain foreign corporations that conduct business in the United States must file this company income tax return. It applies to traditional and commercial-type life insurance businesses, ensuring that taxable income and federal income tax liability are accurately calculated according to Internal Revenue Service rules.

This form gives the IRS essential details on each insurer’s financial activities, including gains, reserves, and deductions, determining total insurance company income tax obligations. It also helps the agency verify compliance with U.S. tax law by matching company-reported figures with policyholder and investment data. Using the correct federal tax forms and accurate reporting ensures that each life insurance company remains compliant and avoids unnecessary IRS notices or penalties.

When You’d Use IRS Form 1120-L (2017)

You would use IRS Form 1120-L (2017) when your company needs to correct, update, or submit a late corporate tax return for the 2017 tax year.

• Late or Amended Return: You must file a late or amended return if your company missed the original deadline or received IRS notices about unfiled or inaccurate information.
• Correction of Tax Errors: You would submit this form to fix miscalculations in taxable income, deductions, or gains that affect your company’s overall tax liability.
• IRS Response Requirements: The form is required when replying to the Internal Revenue Service regarding underreported income, unpaid tax balances, or audit findings.
• Estimated Payment Adjustments: Companies should use them to correct reporting errors involving estimated tax payments or carryover credits from previous years.
• Compliance for Life Insurance Companies: Every domestic life insurance company and certain foreign corporations must file this form to ensure proper insurance company income tax compliance.

Key Rules or Details for 2017

Understanding the specific regulations for the 2017 tax year is important when completing IRS Form 1120-L (2017). These requirements outline the conditions that applied before the Tax Cuts and Jobs Act introduced significant changes in 2018.

1. Corporate Tax Rate: The federal corporate tax rate for the 2017 tax year was 35%, which was later reduced to 21% beginning in 2018.
   
   
2. Reserve Calculations: Life insurance companies were required to calculate reserves using Section 807 to ensure accurate reporting of life insurance company income.
   
   
3. Alternative Minimum Tax: The corporate alternative minimum tax was applicable in 2017 and required certain corporations to calculate additional liability based on adjusted taxable income.
   
   
4. E-Filing Requirement: Companies that filed ten or more federal returns must use electronic filing to meet IRS compliance standards.
   
   
5. Late Filing Penalty: Any return filed more than sixty days after the due date incurred a minimum penalty of $210 or 100% of the tax due, whichever was smaller.
   
   
6. Timely Filing Obligation: Companies must file by the prescribed deadline to avoid IRS notices, penalty assessments, and accrued interest on unpaid tax amounts.

Step-by-Step (High Level)

Filing IRS Form 1120-L (2017) requires careful preparation and accurate documentation to ensure compliance with Internal Revenue Service requirements. Each step below outlines the proper process for completing and submitting this federal return.

1. Gather all supporting records: Collect the company’s NAIC annual statement, prior-year returns, IRS transcripts, and financial schedules that document reserves, income, deductions, and estimated tax payments.
   
   
2. Prepare the correct form: Use the official 2017 version of Form 1120-L, entering the company’s legal name, employer identification number, and current mailing address exactly as they appear on corporate records.
   
   
3. Attach the required schedules: If assets exceed $10 million, include Schedule M-3, reconciliation schedules, and the NAIC annual statement to verify income and reserve reporting accuracy.
   
   
4. Submit the completed return: File electronically when supported, or mail the return to the appropriate Internal Revenue Service service center, ensuring that all required signatures and payments are included.
   
   
5. Retain all documentation: Federal recordkeeping regulations require you to keep copies of the filed return, schedules, and proof of submission for at least three years after the filing date.

Common Mistakes and How to Avoid Them

Many life insurance companies make preventable mistakes when filing IRS Form 1120-L (2017). Recognizing these issues in advance helps ensure accurate and timely filing.

1. Omitting the NAIC annual statement: Always include the NAIC yearly statement and all required schedules to prevent delays and additional IRS inquiries.
   
   
2. Submitting an unsigned return: Review the form before submission to confirm that an authorized officer has signed and dated it to make the filing valid.
   
   
3. Using the wrong form version: To ensure correct tax calculations, verify that you use the official 2017 Form 1120-L rather than a newer version.
   
   
4. Reporting incorrect estimated payments: Reconcile all estimated tax payments and credits with IRS records to avoid penalties or interest on unpaid tax.
   
   
5. Mailing to the wrong service center: Check the IRS address assigned to your state or filing type so the return is routed and processed promptly.
   
   
6. Failing to confirm electronic submission: Retain the IRS e-file acknowledgment receipt to verify successful electronic filing and avoid processing errors. 

What Happens After You File IRS Form 1120-L (2017)

Once your 2017 federal return is submitted, the Internal Revenue Service processes it through its corporate review system. Most late or amended life insurance company returns take about twelve to sixteen weeks to process, depending on filing volume and submission method. After acceptance, the IRS issues an acknowledgment notice and updates your company’s account with any balance or refund details. 

A notice outlining penalties, interest, and payment options will be sent if taxes remain unpaid. Companies unable to pay in full may request an installment agreement using Form 9465 or apply online for payment arrangements.

FAQs

What penalties apply for late filing?

If a company files Form 1120-L late, the IRS may impose a penalty of 5% of the unpaid tax for each month it remains unfiled, up to 25%. Returns filed more than sixty days late also face a minimum penalty of $210 or the full tax due.

Can I amend my 2017 Form 1120-L?

You can file an amended return to correct errors in taxable income, deductions, or reported payments. Ensure the 2017 form version is used, and include all supporting schedules and explanations for each change.

How can I check my account or refund status?

You can request an IRS account transcript online at IRS.gov, by phone, or by submitting Form 4506-T. This transcript shows payments, credits, balances, and filing history for your company’s 2017 tax year.

Can penalties be waived for reasonable cause?

Yes, the IRS may remove penalties if you demonstrate reasonable cause, such as illness, natural disasters, or professional reliance. However, interest on unpaid tax cannot be waived under current regulations.

What if I cannot pay my balance in full?

If your company cannot pay the total balance, you should still file the return to avoid additional penalties. To resolve the balance over time, you may apply for an installment agreement through Form 9465 or the IRS’s online payment system.