Foreign Corporation Tax Filings
Once you register with the Secretary of State’s Office and/or Department of Revenue, your business will likely need to make Foreign Corporation Tax Filings and/or Corporate Franchise Tax Filings. Many businesses employ a Certified Public Accountant, tax attorney or other professional to prepare and submit these filings. Often, you may find you pay more in preparer fees than you owe in taxes. While we can’t stop the tax man, ILSA makes the process a whole lot easier and more affordable. Our Corporate Compliance experts prepare and file your non-resident (foreign) corporate zero income and/or minimum state tax returns for you. This allows your CPA to focus on your more complex resident and federal returns.
The Hard Part Is Knowing When to File
Whether and when you need to file depends on numerous factors. Your corporate structure is the key factor, of course. Limited Liability Companies (LLCs) and C and S Corporations commonly need to file, but other types may have their own requirements. Many states also have different deadlines for businesses that use the calendar year versus a fiscal year. Important filing due dates for calendar year filers begin as early as March 15th and extend through April 15th. Fiscal year filing deadlines vary widely. Some states also allow filing extensions for qualified tax payers, which further complicate your tax filing calendar.
Take a look at this recent “explanation” from one state:
For taxable years beginning on or before January 1, 2016, corporate income tax returns are due on or before the 15th day of the 3rd month following the close of the taxable year with the exception of an extension. For tax years beginning on or after January 1, 2016, C corporation returns are due on or before the 15th day of the fourth month following the close of the taxable year (note the S Corporation return due date has not changed). If the due date falls on a weekend or holiday, the return is due the next day that is not a weekend or holiday.
Failure to comply with the different states’ filing deadlines can result in fines, tax penalties and even revocation of your authorization to do business in that state. Some jurisdictions assess penalties for each day a filing is late. It doesn’t take long to wrack up fines in the thousands of dollars.
ILSA Helps You Stay “In Good Standing”
We keep your tax filings calendar for you. Regulatory offices frequently change their requirements and update their forms. This can make it difficult to understand your compliance obligations, especially if you only deal with a certain state once or twice a year. Our long-standing relationships with regulators means we learn about process changes as soon as the states implement them — if not before. Our knowledge base updates continuously since we prepare filings for hundreds of different clients every month.
If you’ve missed any tax filings in the past, ILSA finds these gaps. We provide a customized plan to bring you back into full compliance. Our Corporate Compliance experts prepare the appropriate forms for each year and submit them with the required financial statements. We may even be able to negotiate the reduction of any penalty fees and fines.
When You’re No Longer Doing Business
Companies often run into problems when they decide to exit a state. At the Department of Insurance, you can simply decline to renew your agency license. There are no particular penalties for letting a license lapse. (Never conduct business on a lapsed license, of course.) Tax accounts are an entirely different matter! You’ll need to contact the Secretary of State’s Office and/or Department of Revenue to let them know you’re doing business there any longer. Many states also require one or more tax clearances before they close an account.
Until you formally close your account, you are still required to submit tax filings. This is true even if you’re not actively licensed. If you are downsizing or closing your agency, your dedicated ILSA Corporate Compliance Specialist helps you close your tax account properly. This service is also useful for entities that will no longer exist in their own name (or under their current Federal Employer Identification Number) after a merger or acquisition.