What IRS Form 1120-RIC (2017) Is For

Form 1120-RIC is the U.S. Income Tax Return for Regulated Investment Companies that report income, gains, losses, deductions, and credits for the 2017 tax year (IRS Instructions for Form 1120-RIC (2017)). Any domestic corporation that meets specific requirements and elects to be treated as a RIC must file this form, including mutual funds, closed-end funds, and similar investment companies that qualify under Section 851 of the Internal Revenue Code.

When You'd Use Form 1120-RIC for 2017 (Late or Amended Filing)

Late filing scenarios typically arise when RICs receive IRS notices about unfiled returns, discover missed filing obligations during compliance reviews, or identify errors requiring correction through amended returns. Common situations include receiving Notice CP59 (unfiled return notice), owing balance due from original calculations, or needing to correct distribution reporting to shareholders. For 2017 returns filed late, any refund claims must generally be filed within three years of the original due date (typically by April 15, 2021) to preserve refund eligibility (IRS Instructions for Form 1120-RIC (2017)).

Key Rules Specific to 2017

The 2017 tax year featured unique transitional provisions due to the Tax Cuts and Jobs Act. RICs with fiscal years straddling January 1, 2018, must use blended tax rates—applying pre-2018 graduated corporate rates to the portion before January 1, 2018, and the new 21% flat rate to the portion after (IRS Instructions for Form 1120-RIC (2017)). The minimum penalty for filing more than 60 days late increased to the lesser of tax due or $210 for returns due after December 31, 2016. Special disaster relief expanded charitable contribution deductions for contributions made after August 22, 2017, related to Hurricane Harvey, Irma, and Maria.

Step-by-Step (High Level)

• Gather account transcripts from IRS.gov or by calling 1-800-908-9946 to verify any prior filings and outstanding notices
  
  
• Complete Form 1120-RIC using the correct 2017 version, ensuring all required schedules (such as Schedule D for capital gains, Schedule M-1 for book-tax differences) are attached
  
  
• Attach supporting statements for distribution calculations, including Forms 1099-DIV provided to shareholders and any excise tax calculations under Section 4982
  
  
• Mail completed return to the appropriate IRS service center based on your location (see "Where to File" instructions), or file electronically through authorized e-file providers
  
  
• Maintain copies of all filed documents and supporting records for at least three years from the filing date
  
  

Common Mistakes and How to Avoid Them

• Incorrect distribution calculations: Ensure the 90% distribution requirement calculation includes both investment company taxable income and tax-exempt interest portions as specified in Section 561
  
  
• Missing excise tax considerations: File Form 8613 if subject to the 4% excise tax on undistributed income under Section 4982, which operates on a calendar year basis regardless of the RIC's fiscal year
  
  
• Inadequate shareholder reporting: Verify that all dividend distributions reported on the return match amounts reported to shareholders on Forms 1099-DIV and that capital gain dividends are properly designated
  
  
• Asset and income test failures: Document any failures to meet the quarterly asset diversification or 90% income source requirements, including reasonable cause explanations and corrective actions taken within six months
  
  
• Blended tax rate errors: For fiscal year filers with years spanning January 1, 2018, carefully apply the complex blended rate calculations using the worksheets provided in Schedule J instructions
  
  
• Late filing penalty miscalculations: Remember the increased minimum penalty of $210 for returns more than 60 days late, and document reasonable cause explanations if applicable
  
  

What Happens After You File

The IRS typically processes corporate returns within 6-8 weeks for paper filings and 2-3 weeks for electronic filings, though late or amended returns may take additional time due to manual processing requirements. You may receive notices requesting additional documentation or clarification of distribution calculations. If you owe additional tax, payment plans are available through Form 9465 (Installment Agreement Request) or the Online Payment Agreement system (IRS.gov/OPA). Any disagreements with IRS adjustments can be appealed through the Office of Appeals, typically within 30 days of receiving a notice of proposed adjustment. Interest accrues on unpaid balances from the original due date at rates determined quarterly under Section 6621.

FAQs

Can I still file my 2017 Form 1120-RIC if I'm several years late?

Yes, you can file late returns at any time, but you'll face penalties and interest. If you're due a refund, you generally have three years from the original due date to claim it, which has likely expired for 2017 returns.

What's the penalty for filing my 2017 return late?

The penalty is 5% of unpaid tax per month (or part of month) up to 25% maximum, with a minimum penalty of $210 for returns over 60 days late. Late payment penalties add another 0.5% per month (IRS Instructions for Form 1120-RIC (2017)).

Do I need to get tax transcripts before filing a late return?

While not required, transcripts help verify any prior filings, payments made, or IRS notices issued. Request them at IRS.gov or call 1-800-908-9946.

Should I also amend my state returns if I file an amended federal Form 1120-RIC?

Most states require amended returns when federal returns are amended, but requirements vary by state. Check with each state where the RIC is registered or conducts business.

How do I handle the excise tax on undistributed income for 2017?

File Form 8613 if you failed to distribute the required amounts by December 31, 2017. The 4% excise tax applies to the shortfall in calendar year distributions regardless of your fiscal year (26 U.S. Code § 4982).

Can penalties be waived for reasonable cause?

Yes, the IRS may waive penalties if you can demonstrate the late filing was due to reasonable cause rather than willful neglect. First-time penalty abatement may also be available if you have a clean compliance history (IRS.gov/Penalty-Relief).

What if I discover errors in distributions already reported to shareholders?

You may need to file corrected Forms 1099-DIV for shareholders and ensure the amended Form 1120-RIC matches the corrected distribution amounts. The IRS provides guidance on correcting information returns through the General Instructions for Certain Information Returns.

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