Instructions for Form 100W - FormSend

See R&TC Sections 19142, 19144,19145,19147, 19148, 19149, 19150, 19151, and19161 for more information.Note: If the corporation uses Exception B orException C to compute or eliminate any of thefour installments, form FTB 5806 must beattached to the front of Form 100W and thebox on Side 1, line 41b; should be checked.EFT PenaltyIf the corporation must pay its tax liabilityusing EFT, ALL payments must be remitted byEFT to avoid the EFT penalty. The EFT penaltyis 10% of the amount not paid by EFT. SeeR&TC Section 19011 and GeneralInformation G, Electronic Funds Transfer (EFT)for more information.Information reporting penaltiesFor taxable years beginning on or after January1, 1997, U.S. corporations that have anownership interest (directly or indirectly) in aforeign corporation and were required to filefederal Form(s) 5471, Information Return ofU.S. Persons With Respect to Certain ForeignCorporations, with the federal return, mustattach a copy(ies) to the California return. Thepenalty for failure to include a copy of federalForm(s) 5471, as required, is $1,000 perrequired form for each year the failure occurs.The penalty applies for taxable years beginningon or after January 1, 1998. The penalty willnot be assessed if the taxpayer provides a copyof the form(s) within 90 days of request fromthe FTB and the taxpayer agrees to attach acopy(ies) of federal Form 5471 to all returnsfiled for subsequent years.Certain domestic corporations that are 25% ormore foreign-owned and foreign corporationsengaged in a U.S. trade or business mustattach federal Form(s) 5472, InformationReturn of a 25% Foreign-Owned U.S.Corporation or a Foreign Corporation Engagedin a U.S. Trade or Business, to Form 100W.The penalty for failing to include federalForm(s) 5472, as required, is $10,000 perrequired form for each year the failure occurs.See R&TC Section 19141.5 for moreinformation.If the corporation does not file its Form 100Wby the due date or extended due date,whichever is later, copies of federalForm(s) 5472 must still be filed on time or thepenalty will be imposed. Attach a cover letterto the copies indicating the taxpayer’s name,California corporation number, and taxableyear. Mail to the same address used for returnswithout payments. See General Information H,Where to File. When the corporation files Form100W, also attach copies of the federalForm(s) 5472.Record maintenance penaltyThe penalty for failure to maintain certainrecords is $10,000 for each taxable year forwhich the failure applies. In addition, if thefailure continues for more than 90 days afterthe FTB notifies the corporation of the failure,in general, a penalty of $10,000 may beassessed for each additional 30-day period ofcontinued failure. For taxable years beginningon or after January 1, 1996, there is nomaximum amount of penalty that may beassessed.See “Important Information” starting onpage 3 for a discussion of the records requiredto be maintained. See R&TC Section 19141.6and the regulations thereunder for moreinformation.Accuracy and fraud related penaltiesCalifornia conforms to IRC Sections 6662through 6665 that authorize the imposition ofan accuracy-related penalty equal to 20% ofthe related underpayment, and the impositionof a fraud penalty equal to 75% of the relatedunderpayment. See R&TC Section 19164 formore information.California Secretary of State (SOS) penaltyThe California Corporations Code requires theFTB to assess a penalty for failure to file anannual Statement of Information with theCalifornia SOS. For more information, seeR&TC Section 19141 or contact:STATEMENT OF INFORMATION UNITATTENTION: PENALTYCALIFORNIA SECRETARY OF STATEPO BOX 944230SACRAMENTO CA 94244-2300Telephone: (916) 657-3537Other penaltiesOther penalties may be imposed for a checkreturned for insufficient funds, non-U.S.foreign corporations operating while forfeitedor without qualifying to do business inCalifornia, and domestic corporationsoperating while suspended in California. SeeR&TC Sections 19134 and 19135 for moreinformation.N InterestInterest is due and payable on any tax due ifnot paid by the original due date ofForm 100W. Interest is also due on somepenalties. The automatic extension of time tofile Form 100W does not stop interest fromaccruing. California follows federal rules forthe calculation of interest. Get FTB Pub. 1138,Business Entity Refund/Billing Information, formore information.O Dissolution/WithdrawalThe corporation must fill in the applicable boxon Form 100W, Side 1, question A, if dissolving,merging or withdrawing. The date shouldbe the date the corporation filed with theCalifornia SOS.The franchise tax for the period in which thecorporation formally dissolves or withdraws ismeasured by the income of the year in which itceased doing business in California, unlesssuch income has already been taxed at the rateprescribed for the taxable year of dissolutionor withdrawal.A corporation that commenced doing businessin California before January 1, 1972, is alloweda credit that may be refunded in the year ofdissolution or withdrawal. The amount of therefundable credit is the difference between theminimum franchise tax for the corporation’sfirst full 12 months of doing business and thetotal tax paid for the same period.To claim this credit, add this amount to thevalue on line 35. Make a notation to the rightof Side 1, line 35: “Dissolving/Withdrawing.”The return for the final taxable period is due onor before the 15th day of the 3rd full monthafter the month during which the corporationformally dissolved or withdrew.To get samples and/or forms for filing adissolution, surrender, or merger agreementaddress your request to:LEGAL REVIEWCALIFORNIA SECRETARY OF STATE1500 11TH ST 3RD FLOORSACRAMENTO CA 95814-5701Telephone: (916) 657-5448P Ceasing BusinessFor taxable years beginning on or after January1, 2000 (other than the first taxable yearbeginning on or after that date), the tax for thefinal year in which the corporation doesbusiness in California is determined accordingto or measured by its net income for thetaxable year during which the corporationceased doing business.In any event, the tax for any taxable year shallnot be less than the minimum franchise tax.For more information, see R&TCSection 23151.1.The unreported income on installmentobligations, the distribution of notes, and thedistribution of corporate assets (land,buildings) at a gain must be included inincome in the year of cessation. There is nofederal law counterpart regarding this issue.For more information, see R&TCSections 24672 and 24451.Note: A domestic or qualified corporation willremain subject to the minimum franchise taxfor each year it is in existence until a certificateof dissolution (and certificate of winding up, ifnecessary), or certificate of withdrawal is filedwith the California SOS. See GeneralInformation O, Dissolution/Withdrawal, andR&TC Sections 23331 through 23335 for moreinformation.Q Suspension/ForfeitureIf a corporation does not file a Form 100Wand/or does not pay any tax, penalty, orinterest due, its powers, rights, and privilegesmay be suspended (in the case of a domesticcorporation) or forfeited (in the case of aforeign corporation).Corporations that operate while suspended orforfeited are subject to a $2,000 penalty, whichis in addition to any tax, penalties, and interestalready accrued. Also, any contracts enteredinto during suspension or forfeiture arevoidable at the request of any party to thecontract other than the suspended or forfeitedcorporation.Such contracts will remain voidable andunenforceable unless the corporation appliesfor relief from contract voidability and the FTBgrants relief.See R&TC Sections 19135, 19719, 23301,23305.1, and 23305.2 for more information.R Apportionment of IncomeCorporations with business income attributableto sources both within and outside ofCalifornia are required to apportion suchincome. To calculate the apportionmentpercentage, use Schedule R, Apportionmentand Allocation of Income. Be sure to answerQuestion M on Form 100W, Side 2.For more information, see R&TCSections 25120 through 25136.Form 100W Booklet 2004 Page 7