Form 8752 (2019)
Page 3
A partnership’s section 444 election ends if the partnership
changes its accounting period to its required tax year or some other
permitted year, it is penalized for willfully failing to comply with the
requirements of section 7519, or it becomes a member of a tiered
structure and the same tax year exception doesn’t apply (see
Temporary Regulations section 1.444-2T for more about tiered
structures).
An S corporation’s section 444 election ends if it changes its
accounting period to a calendar year or some other permitted year,
it is penalized for willfully failing to comply with the requirements of
section 7519, it becomes a member of a tiered structure and the
same tax year exception doesn’t apply (see Temporary Regulations
section 1.444-2T), or its S corporation election terminates (unless it
immediately becomes a personal service corporation).
See Temporary Regulations section 1.444-1T(a)(5)(ii) for the
effective date of the termination of a section 444 election.
Once a section 444 election is terminated, the entity may never
make another section 444 election.
Line 1. Net income for base year. The term “base year” means the
tax year preceding the applicable election year. Any tax year for
which a section 444 election is in effect, including the first tax year
the section 444 election is made, is an applicable election year. For
example, if you are completing Form 8752 for the applicable
election year beginning October 1, 2019, and ending September 30,
2020, the base year is the tax year beginning October 1, 2018, and
ending September 30, 2019.
Partnerships. Line 1 net income is the aggregate (not less than
zero) of the partnership’s items of income and expense, other than
tax-exempt income, nondeductible expenses, and guaranteed
payments under section 707(c). When figuring this amount,
disregard any limitations at the partner level. For base years
beginning in 2018, line 1 should equal the amount on the 2018 Form
1065, line 1, of Analysis of Net Income (Loss), plus the aggregate
items of income and expense, if any, reported on the attached
statement for Schedule K, line 20c (but not less than zero).
S corporations. Line 1 net income is the aggregate (not less than
zero) of the corporation’s items of income and expense, other than
tax-exempt income and nondeductible expenses. When figuring this
amount, disregard any limitations at the shareholder level. For base
years beginning in 2018, line 1 should equal the amount on the 2018
Form 1120-S, Schedule K, line 18, plus the aggregate items of
income and expense, if any, reported on Schedule K, line 17d (but
not less than zero). For this purpose, all S corporations must
complete Schedule K, line 18.
If an S corporation was a C corporation for its base year, the
C corporation’s taxable income is treated as the net income of the
S corporation for the base year. See Temporary Regulations section
1.7519-1T(b)(5) for other details.
Line 2. Applicable payments. In general, the term “applicable
payments” means any amount deductible in the base year that is
includible at any time, directly or indirectly, in the gross income of
any partner or shareholder who was a partner or shareholder during
the base year. However, the term doesn’t include guaranteed
payments. Examples of applicable payments are officer’s
compensation, wages, and rent paid to any partner or shareholder.
If the S corporation was a C corporation for its base year,
applicable payments of the C corporation are treated as if received
from an S corporation.
Line 3. Deferral ratio. The deferral period is the number of months
between:
• The beginning of the elected tax year, and
• The close of the first required tax year ending within such a
year.
For example, the required tax year for an S corporation is the
calendar year, ending on December 31. If an S corporation elects a
tax year beginning on November 1, there would be 2 months
between the beginning of the elected tax year and the end of the
required tax year (December 31). The deferral period for the elected
tax year would be 2 months.
Line 9b. If you enter zero on line 9b and you didn’t make any prior
year required payment for which a refund can be claimed, enter
zero on line 10, skip lines 11 and 12, and complete the signature
section. You are required to file Form 8752 to show that you have a
zero liability for the applicable election year beginning in 2019.
Line 11. Required payment due. If you are enrolled in the
Electronic Federal Tax Payment System (EFTPS), you can pay your
balance due online or by phone. EFTPS is a free service provided
by the U.S. Department of Treasury. If you aren’t required to use
EFTPS, you may still participate voluntarily. To pay the balance due,
get more information, or enroll in EFTPS, visit www.eftps.gov or call
1-800-555-4477.
To pay by check or money order. Enclose a check or money
order for the amount on line 11 payable to “United States Treasury.”
Write the entity’s employer identification number and “Form 8752”
on the check or money order.
Line 12. Refund of net prior year payments. No refund will be
made before the later of: (a) April 15, 2020, or (b) 90 days after
Form 8752 is filed per section 7519(c)(3). No interest will be paid on
the amount refunded.
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 required payment.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the form
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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.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden for
business taxpayers filing this form is approved under OMB control
number 1545-0123 and is included in the estimates shown in the
instructions for their business income tax return.
If you have suggestions for making this form simpler, we would
be happy to hear from you. You can send us comments from
www.irs.gov/FormComments. Or you can write to the Internal
Revenue Service, Tax Forms and Publications, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224. Don’t send the form to
this office. Instead, see Where to file, earlier.
