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b. 10 million; and The RIC disposes of the assetfollowing the identification of thefailure (or the requirements of section851(b)(3) are otherwise met) within 6months after the last day of thequarter in which the RIC identified thefailure.Note. For special rules regardingfailure to meet the requirements of theincome and asset tests, see sections851(d)(2) and 851(i).Distribution requirements. TheRIC's deduction for dividends paid forthe tax year (as defined in section561, but without regard to capital gaindividends) equals or exceeds the sumof: 90% of its investment companytaxable income determined withoutregard to section 852(b)(2)(D); and 90% of the excess of the RIC'sinterest income excludable from grossincome under section 103(a) over itsdeductions disallowed under sections265 and 171(a)(2).A RIC that does not satisfy thedistribution requirements willCAUTION be subject to taxation as a Ccorporation.!Earnings and profits. The RICmust either have been a RIC for all taxyears ending after November 7, 1983,or, at the end of the current tax year,have had no accumulated earningsand profits from any non-RIC tax year.Note. For this purpose, current yeardistributions are treated as made fromthe earliest earnings and profitsaccumulated in any non-RIC tax year.See section 852(c)(3). Also, seesection 852(e) for procedures thatmay allow the RIC to avoiddisqualification for the initial year if theRIC did not meet this requirement.Definition of a FundThe term “fund” refers to a separateportfolio of assets, whose beneficialinterests are owned by the holders ofa class or series of stock of the RICthat is preferred over all other classesor series for that portfolio of assets.When To FileGenerally, a RIC must file its incometax return by the 15th day of the 4thmonth after the end of its tax year. Anew RIC filing a short period returnmust generally file by the 15th day ofWhere To FileFile the RIC's return at the applicable IRS address listed below.If the RIC's principalbusiness, office, or agencyis located in:Connecticut, Delaware, Districtof Columbia, Georgia, Illinois,Indiana, Kentucky, Maine,Maryland, Massachusetts,Michigan, New Hampshire,New Jersey, New York, NorthCarolina, Ohio, Pennsylvania,Rhode Island, South Carolina,Tennessee, Vermont, Virginia,West Virginia, WisconsinAnd the total assets atthe end of the tax yearare:Use the following address:Less than 10 million andSchedule M-3 is not filedDepartment of the TreasuryInternal Revenue ServiceKansas City, MO64999-0012 10 million or more orSchedule M-3 is filedDepartment of the TreasuryInternal Revenue ServiceOgden, UT84201-0012Any amountDepartment of the TreasuryInternal Revenue ServiceOgden, UT84201-0012Alabama, Alaska, Arizona,Arkansas, California,Colorado, Florida, Hawaii,Idaho, Iowa, Kansas,Louisiana, Minnesota,Mississippi, Missouri,Montana, Nebraska, Nevada,New Mexico, North Dakota,Oklahoma, Oregon, SouthDakota, Texas, Utah,Washington, WyomingA group of corporations with members located in more than one service centerarea will often keep all the books and records at the principal office of themanaging corporation. In this case, file the tax returns with the service centerfor the area in which the principal office of the managing corporation is located.the 4th month after the short periodends. A RIC that has dissolved mustgenerally file by the 15th day of the4th month after the date of dissolution.However, a RIC with a fiscal taxyear ending June 30 must file by the15th day of the 3rd month after theend of its tax year. A RIC with a shorttax year ending anytime in June willbe treated as if the short year endedon June 30, and must file by the 15thday of the 3rd month after the end ofits tax year.If the due date falls on a Saturday,Sunday, or legal holiday, the RIC mayfile its return on the next business day.Private Delivery ServicesRICs can use certain private deliveryservices (PDS) designated by the IRSto meet the “timely mailing as timelyfiling” rule for tax returns. Go toIRS.gov/PDS for the current list ofdesignated services.The PDS can tell you how to getwritten proof of the mailing date.For the IRS mailing address to useif you're using PDS, go to IRS.gov/PDSstreetAddresses.-3-Private delivery services can'tdeliver items to P.O. boxes.CAUTION You must use the U.S. PostalService to mail any item to an IRSP.O. box address.!Extension of Time To FileFile Form 7004, Application forAutomatic Extension of Time To FileCertain Business Income Tax,Information, and Other Returns, torequest an extension of time to file.Generally, the RIC must file Form7004 by the regular due date of thereturn.Who Must SignThe return must be signed and datedby: The president, vice president,treasurer, assistant treasurer, chiefaccounting officer; or Any other corporate officer (such asa tax officer) authorized to sign.If a return is filed on behalf of a RICby a receiver, trustee, or assignee, thefiduciary must sign the return, insteadof the corporate officer. Returns andforms signed by a receiver or trustee

in bankruptcy on behalf of a RIC mustbe accompanied by a copy of theorder or instructions of the courtauthorizing signing of the return orform.Note. If this return is being filed for aseries fund (as defined in section851(g)(2)), the return may be signedby any officer authorized to sign forthe corporation in which the fund is aseries.If an employee of the RICcompletes Form 1120-RIC, the paidpreparer's space should remain blank.A preparer who does not charge theRIC to prepare Form 1120-RIC shouldnot complete that section. Generally,anyone who is paid to prepare thereturn must sign it and fill in the “PaidPreparer Use Only” section.The paid preparer must completethe required preparer information and: Sign the return in the spaceprovided for the preparer's signature,and Give a copy of the return to thecorporation.A paid preparer may signTIP original or amended returnsby rubber stamp, mechanicaldevice, or computer softwareprogram.Paid PreparerAuthorizationIf the RIC wants to allow the IRS todiscuss its 2021 tax return with thepaid preparer who signed the return,check the “Yes” box in the signaturearea of the return. This authorizationapplies only to the individual whosesignature appears in the “PaidPreparer Use Only” section of theRIC's return. It does not apply to thefirm, if any, shown in that section.If the “Yes” box is checked, the RICis authorizing the IRS to call the paidpreparer to answer any questions thatmay arise during the processing of itsreturn. The RIC is also authorizing thepaid preparer to: Give the IRS any information that ismissing from the return; Call the IRS for information aboutthe processing of the return or thestatus of any related refund orpayment(s); and Respond to certain IRS noticesabout math errors, offsets, and returnpreparation.The RIC is not authorizing the paidpreparer to receive any refund check,bind the RIC to anything (includingany additional tax liability), orotherwise represent the RIC beforethe IRS.The authorization will automaticallyend no later than the due date(excluding extensions) for filing theRIC's 2022 tax return. If the RIC wantsto expand the paid preparer'sauthorization or revoke theauthorization before it ends, see Pub.947, Practice Before the IRS andPower of Attorney.Assembling the ReturnTo ensure that the RIC's tax return iscorrectly processed, attach allschedules, statements, and otherforms after page 4, Form 1120-RIC, inthe following order.1. Schedule N (Form 1120).2. Schedule D (Form 1120).3. Form 8949.4. Form 4136.5. Form 8948.6. Form 965-B.7. Form 8941.8. Form 3800.9. Form 8997.10. Additional schedules inalphabetical order.11. Additional forms in numericalorder.12. Supporting statements andattachments.Complete every applicable entryspace on Form 1120-RIC. Do notenter “See attached” instead ofcompleting the entry spaces. If morespace is needed on the forms orschedules, attach separate sheetsusing the same size and format as theprinted forms.If there are supporting statementsand attachments, arrange them in thesame order as the schedules or formsthey support and attach them last.Show the totals on the printed forms.Enter the RIC's name and EIN oneach supporting statement orattachment.Tax PaymentsGenerally, the RIC must pay the taxdue in full no later than the due datefor filing its tax return (not includingextensions). See the instructions for-4-line 31. If the due date falls on aSaturday, Sunday, or legal holiday,the payment is due on the next daythat isn't a Saturday, Sunday, or legalholiday.Electronic DepositRequirementRICs must use electronic fundstransfer to make all federal taxdeposits (such as deposits ofemployment, excise, and corporateincome tax). Generally, electronicfunds transfers are made using theElectronic Federal Tax PaymentSystem (EFTPS). However, if the RICdoes not want to use EFTPS, it canarrange for its tax professional,financial institution, payroll service, orother trusted third party to makedeposits on its behalf. Also, it mayarrange for its financial institution tosubmit a same-day tax wire payment(discussed below) on its behalf.EFTPS is a free service provided bythe Department of the Treasury.Services provided by a taxprofessional, financial institution,payroll service, or other third partymay have a fee.To get more information aboutEFTPS or to enroll in EFTPS, visitEFTPS.gov, or call 800-555-4477(TTY/TDD 800-733-4829).Depositing on time. For any depositmade by EFTPS to be on time, theRIC must submit the deposit by 8 p.m.Eastern time the day before the datethe deposit is due. If the RIC uses athird party to make deposits on itsbehalf, they may have different cutofftimes.Same-day wire payment option. Ifthe RIC fails to submit a deposittransaction on EFTPS by 8 p.m.Eastern time on the day before thedate a deposit is due, it can still makeits deposit on time by using theFederal Tax Collection Service(FTCS). To learn more about theinformation the RIC will need toprovide its financial institution to makea same-day wire payment, go toIRS.gov/SameDayWire.Estimated Tax PaymentsGenerally, the following rules apply tothe RIC's payments of estimated tax. The RIC must make installmentpayments of estimated tax if it expectsits total tax for the year (less

applicable credits) to be 500 ormore. The installments are due by the15th day of the 4th, 6th, 9th, and 12thmonths of the tax year. If any datefalls on a Saturday, Sunday, or legalholiday, the installment is due on thenext regular business day. The RIC must use electronic fundstransfer to make installment paymentsof estimated tax. Use Form 1120-W, Estimated Taxfor Corporations, as a worksheet tocompute estimated tax. See theInstructions for Form 1120-W. If the RIC overpaid its estimatedtax, it may be able to get a quickrefund by filing Form 4466,Corporation Application for QuickRefund of Overpayment of EstimatedTax. The overpayment must be atleast 10% of the RIC's expectedincome tax liability and at least 500.For more information, includingpenalties, see the instructions forline 30, Estimated tax penalty, later.Interest and PenaltiesInterest. Interest is charged on taxespaid late even if an extension of timeto file is granted. Interest is alsocharged on penalties imposed forfailure to file, negligence, fraud,substantial valuation misstatements,substantial understatements of tax,and reportable transactionunderstatements from the due date(including extensions) to the date ofpayment. The interest charge isfigured at a rate determined undersection 6621.Late filing of return. A RIC thatdoes not file its tax return by the duedate, including extensions, may bepenalized 5% of the unpaid tax foreach month or part of a month thereturn is late, up to a maximum of 25%of the unpaid tax. The minimumpenalty for a return that is over 60days late is the smaller of the tax dueor 435. The penalty will not beimposed if the RIC can show that thefailure to file on time was due toreasonable cause.Late payment of tax. A RIC thatdoes not pay the tax when due maygenerally be penalized 1/2 of 1% of theunpaid tax for each month or part of amonth the tax is not paid, up to amaximum of 25% of the unpaid tax.The penalty will not be imposed if theRIC can show that the failure to payon time was due to reasonable cause. Any other method authorized by theInternal Revenue Code.Reasonable cause determinations.If the RIC receives a notice about apenalty after it files its return, send theIRS an explanation and we willdetermine if the RIC meets thereasonable cause criteria. Do notattach an explanation when the RIC'sreturn is filed.For more information, see Pub.538, Accounting Periods andMethods.Trust fund recovery penalty. Thispenalty may apply if certain excise,income, social security, and Medicaretaxes that must be collected orwithheld are not collected or withheld,or these taxes are not paid. Thesetaxes are generally reported on: Form 720, Quarterly Federal ExciseTax Return; Form 941, Employer'sQUARTERLY Federal Tax Return; Form 944, Employer's ANNUALFederal Tax Return; or Form 945, Annual Return ofWithheld Federal Income Tax.The trust fund recovery penaltymay be imposed on all persons whoare determined by the IRS to beresponsible for collecting, accountingfor, or paying over these taxes, andwho acted willfully in not doing so.The penalty is equal to the full amountof the unpaid trust fund tax. See theInstructions for Form 720 or Pub. 15(Circular E), for details, including thedefinition of responsible persons.Note. The trust fund recovery penaltywill not apply to any amount of trustfund taxes an employer holds back inanticipation of the credit for qualifiedsick and family leave wages or theemployee retention credit that theyare entitled to. See Pub. 15 or Pub. 51for more information.Other penalties. Other penalties canbe imposed for negligence,substantial understatement of tax,reportable transactionunderstatements, and fraud. Seesections 6662, 6662A, and 6663.Accounting MethodsFigure taxable income using themethod of accounting regularly usedin keeping the RIC's books andrecords. In all cases, the method usedmust clearly reflect taxable income.Generally, permissible methodsinclude: Cash, Accrual, or-5-Accrual method. Generally, a RICmust use the accrual method ofaccounting if its average annual grossreceipts for the prior 3 years exceed 26 million. See section 448(c).Mark-to-market accounting method. Generally, dealers in securitiesmust use the mark-to-marketaccounting method described insection 475. Under this method, anysecurity that is inventory to the dealermust be held at its fair market value(FMV).Any security held by a dealer that isnot inventory and held at the close ofthe tax year is treated as sold at itsFMV on the last business day of thetax year. Any resulting gain or lossmust be taken into account that yearin determining gross income. The gainor loss taken into account is generallytreated as ordinary gain or loss.For details, including exceptions,see section 475, the relatedregulations, and Rev. Rul. 97-39,1997-39 I.R.B. 4.Dealers in commodities and tradersin securities and commodities mayelect, with some exceptions, to usethe mark-to-market accountingmethod. To make the election, theRIC must file a statement describingthe election, the first tax year theelection is to be effective, and in thecase of an election for traders insecurities or commodities, the trade orbusiness for which the election ismade. Except for new taxpayers, thestatement must be filed by the duedate (not including extensions) of theincome tax return for the tax yearimmediately preceding the electionyear and attached to that return, or ifapplicable, to a request for anextension of time to file that return. Formore details, see Rev. Proc. 99-17,1999-7 I.R.B. 52, and sections 475(e)and (f).Change in accounting method.Generally, the RIC must get IRSconsent to change either an overallmethod of accounting or theaccounting treatment of any materialitem for income tax purposes. Toobtain consent, the RIC must file Form3115, Application for Change in

Accounting Method, during the taxyear for which the change isrequested. See the Instructions forForm 3115 and Pub. 538 for moreinformation and exceptions.Accounting PeriodsA RIC must figure its taxable incomeon the basis of a tax year. A tax yearis the annual accounting period a RICuses to keep its records and report itsincome and expenses. RICs can usea calendar year or a fiscal year. Formore information about accountingperiods, see Regulations sections1.441-1 and 1.441-2.Change of tax year. Generally, aRIC must receive consent from theIRS before changing its tax year. Toobtain the consent, file Form 1128,Application To Adopt, Change, orRetain a Tax Year. However, undercertain conditions, a RIC may changeits tax year without obtaining theconsent.See the Instructions for Form 1128and Pub. 538 for more information onaccounting periods and tax years.Rounding Off toWhole DollarsThe RIC may enter decimal pointsand cents when completing its return.However, the RIC should round offcents to whole dollars on its return,forms, and schedules to makecompleting its return easier. The RICmust either round off all amounts onits return to whole dollars, or usecents for all amounts. To round, dropamounts under 50 cents and increaseamounts from 50 to 99 cents to thenext dollar. For example, 8.40rounds to 8 and 8.50 rounds to 9.If two or more amounts must beadded to figure the amount to enter ona line, include cents when adding theamounts and round off only the total.RecordkeepingKeep the RIC's records for as long asthey may be needed foradministration of any provision of theInternal Revenue Code. Usually,records that support an item ofincome, deduction, or credit on thereturn must be kept for 3 years fromthe date the return is due or filed,whichever is later. Keep records thatverify the RIC's basis in property foras long as they are needed to figurethe basis of the original orreplacement property.The RIC should keep copies of allfiled returns. They help in preparingfuture and amended returns and in thecalculation of earnings and profits.Other Forms That May BeRequiredIn addition to Form 1120-RIC, the RICmay have to file some of the followingforms. Also, see Pub. 542,Corporations, for an expanded list offorms the RIC may be required to file.Form 976, Claim for DeficiencyDividends Deductions by a PersonalHolding Company, RegulatedInvestment Company, or Real EstateInvestment Trust. Use this form toclaim a deficiency dividend deductionunder section 860.Form 1096, Annual Summary andTransmittal of U.S. InformationReturns. Use Form 1096 to transmitForms 1099 and 5498 to the InternalRevenue Service.Form 1099-DIV, Dividends andDistributions. Report certain dividendsand distributions.Form 1099-INT, Interest Income.Report interest income.Form 2438, Undistributed CapitalGains Tax Return, must be filed by theRIC if it designates undistributed netlong-term capital gains under section852(b)(3)(D).Form 2439, Notice to Shareholder ofUndistributed Long-Term CapitalGains, must be completed and a copygiven to each shareholder for whomthe RIC paid tax on undistributed netlong-term capital gains under section852(b)(3)(D).Form 3520, Annual Return ToReport Transactions With ForeignTrusts and Receipt of Certain ForeignGifts, may be required if the RICreceived a distribution from, was agrantor of, or transferor to a foreigntrust during the tax year. SeeQuestion 5 of Schedule N (Form1120).Form 5471, Information Return ofU.S. Persons With Respect ToCertain Foreign Corporations. UseForm 5471 if the RIC is a U.S.shareholder of a controlled foreigncorporation, a specified foreigncor

The term "regulated investment company" applies to any domestic corporation that: Is registered throughout the tax year as a management company or unit investment trust under the Investment Company Act of 1940 (ICA), Has an election in effect under the ICA to be treated as a business development company, or Is a common trust .