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Interest Charge on DISC-Related OMB No. 1545-0939
Form 8404 Deferred Tax Liability
Department of the Treasury File Form 8404 separately from your income tax return. See Where to file below. 22
Internal Revenue Service Go to www.irs.gov/Form8404 for the latest information. 20
A Check applicable box to Name of shareholder B Shareholder’s identifying
show type of taxpayer. number
Corporation Address (number, street, room, suite, or P.O. box number)
Individual C IC-DISC’s identifying
Trust or City or town, state or province, country, and ZIP or foreign postal code number
Decedent’s estate
D Shareholder’s tax year for which interest charge is required to be paid (see instructions) E Name of IC-DISC

Note: See Line-by-Line Instructions , later.
1 Taxable income or loss on tax return (actual or estimated) . . . . . . . . . . . . 1
2 Deferred DISC income from line 10, Part III, Schedule K (Form 1120-IC-DISC) . . . . . 2
3 Section 995(f)(2) adjustments to line 1 income or loss . . . . . . . . . . . . . 3
4 Combine lines 1, 2, and 3. If zero or less, don’t file this form . . . . . . . . . . . 4
5 Tax liability on line 4 amount . . . . . . . . . . . . . . . . . . . . . 5
6 Tax liability per return (actual or estimated) . . . . . . . . . . . . . . . . . 6
7 DISC-related deferred tax liability. Subtract line 6 from line 5 . . . . . . . . . . . 7
8 Base period T-bill rate factor . . . . . . . . . . . . . . . . . . . . . 8
9 Interest charge due. Multiply line 7 by line 8. (See Paying the interest charge below.) . . 9
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and
belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign
Here
Signature and title (if any) Date
Print/Type preparer’s name Preparer’s signature Date Check if PTIN
Paid self-employed
Preparer
Firm’s name Firm’s EIN
Use Only
Firm’s address Phone no.
Future Developments Where to file. File Form 8404 at the following Amended Form 8404. You are required to file
address. an amended Form 8404 only if the amount of
For the latest information about developments
related to Form 8404 and its instructions, Department of the Treasury the DISC-related deferred tax liability (line 7)
such as legislation enacted after they were Internal Revenue Service changes as a result of audit adjustments,
published, go to www.irs.gov/Form8404. Kansas City, MO 64999 changes you make by the filing of an
amended return, or if estimates were used on
Paying the interest charge. You must pay your original Form 8404 and changes were
General Instructions the interest charge shown on line 9 by the made to these estimates when you filed your
date your federal income tax for the tax year
Section references are to the Internal Revenue tax return. See Proposed Regulations section
is required to be paid. For individuals and 1.995(f)-1(j)(4) for details.
Code unless otherwise noted. corporations, the interest is generally due on
Purpose of form. Shareholders of Interest the 15th day of the 4th month following the
Charge Domestic International Sales close of the tax year. For corporations with a Specific Instructions
Corporations (IC-DISCs) use Form 8404 to tax year ending on June 30, see section Name and address. Enter the name and
figure and report their interest owed on 2006(a)(3)(B) of P.L. 114-41. address as shown on your tax return from
DISC-related deferred tax liability. Attach a check or money order made which the income or loss on line 1 of Form
Who must file.You must file Form 8404 if (a) payable to “United States Treasury” for the 8404 is obtained. If the return is a joint return,
you are a shareholder of an IC-DISC (or full amount of the interest charge. Don’t also enter your spouse’s name as shown on
former IC-DISC); (b) the IC-DISC reports combine the interest charge with any other Form 1040 or 1040-SR.
deferred DISC income to you on line 10, Part tax or interest due. Write your identification Item A—Type of taxpayer. Check the
III of Schedule K (Form 1120-IC-DISC); and (c) number and “Form 8404—Interest Due” on applicable box to indicate your status as a
the addition of this income would result in your payment. taxpayer.
increased taxable income if it were included If the interest charge isn’t paid by the due Partnerships and S corporations attribute
on your tax return for the tax year. date, interest, compounded daily, at the rate their share of deferred DISC income to
When to file. File Form 8404 by the due date specified under section 6621, will be imposed partners and shareholders, and the partners
of your federal income tax return (excluding on the amount of unpaid interest from the due and shareholders complete Form 8404.
extensions) for your tax year that ends with or date until the date the interest is paid. Item B—Shareholder’s identifying number.
includes the IC-DISC’s tax year end. Payment of estimated tax isn’t required for Individuals must enter their social security
For example, you are a fiscal year the interest charge. See Proposed number. Other filers must enter their employer
corporation with an August 1, 2022, to July Regulations section 1.995(f)-1(j)(3) for other identification number.
31, 2023, tax year and you are a shareholder details. Item C—IC-DISC’s identifying number.
in an IC-DISC with an August 1, 2022, to July For corporations (other than S Enter the identifying number of the IC-DISC
31, 2023, tax year that reports deferred DISC corporations), the annual interest charge is from the Schedule K (Form 1120-IC-DISC) on
income to you for its tax year ending July 31, deductible as an interest expense for the tax which the deferred DISC income was reported
2023. Because your tax year ends with the year it is paid or accrued. See Proposed to you. If income is reported to you from more
IC-DISC’s tax year, you are required to file Regulations section 1.995(f)-1(j)(2) for details than one IC-DISC, enter each IC-DISC’s
Form 8404 on or before November 15, 2023 on the tax year of deductibility. For other identifying number in item C, each IC-DISC’s
(31/ 2months after your tax year ends). filers, this interest isn’t deductible.
For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 62423Z Form 8404 (2022)

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Enlarge image

Form 8404 (2022) Page 2
name in item E (or, enter “See attached” for Lines 5 and 6. “Tax liability” on lines 5 and 6 Privacy Act and Paperwork Reduction Act
items C and E, and attach a statement of the (with and without the deferred DISC income) Notice. We ask for the information on this
IC-DISCs’ names and respective numbers), means the amount of tax imposed on the form to carry out the Internal Revenue laws of
and report the combined income on line 2. IC-DISC shareholder for the tax year by the United States. We need it to figure and
Item D—Tax year. Enter in item D the chapter 1 of the Internal Revenue Code (other collect the right amount of tax. Section 995(f)
calendar year or the beginning and ending than taxes listed below) reduced by credits requires taxpayers to pay over to the IRS
dates of the tax year shown on your tax return allowable against such tax (other than credits interest on DISC-Related Deferred Tax
for which the interest charge is figured. listed below). Liability. This form is used to determine the
See Special Computation Rules, earlier, for amount of tax that you owe. Sections 6001
Special Computation Rules rules for carrybacks and carryovers. These and 6011 require you to provide the
Carrybacks. The determination of the rules may affect the line 5 computation. requested information if the tax applies to
you. Section 6109 requires you to provide
shareholder’s DISC-related deferred tax The following taxes aren’t taken into your identifying number. Routine uses of this
liability on lines 1 through 7 shall be made account. information include disclosing it to the
without taking into account any capital loss • Alternative minimum tax (individuals only). Department of Justice for civil and criminal
carryback or credit carryback to the tax year. litigation and to other federal agencies, as
• Any other provisions described in section
Carryovers. The determination of the 26(b)(2) (relating to certain other taxes treated provided by law. We may disclose the
shareholder’s tax liability (line 5) for the tax as not imposed by chapter 1). information to cities, states, the District of
year is made by disregarding any loss, Columbia, and U.S. commonwealths or
deduction, or credit to the extent that such The following credits aren’t taken into possessions to administer their tax laws. We
loss, deduction, or credit may be carried account. may also disclose this information to other
forward by the shareholder to any other tax • Section 31 (taxes withheld on wages). countries under a tax treaty, to federal and
year. • Section 32 (earned income credit). state agencies to enforce federal nontax
criminal laws, or to federal law enforcement
Note: If the tax year is the last tax year to • Section 34 (fuels credit). and intelligence agencies to combat terrorism.
which the amount of carryforward (of loss,
deduction, or credit) may be carried, the line 3 For 2022, a Form 1040 or 1040-SR filer or a If you don’t provide this information or provide
adjustments and line 5 tax shall be figured Form 1120 filer using the above rules will incomplete or fraudulent information, you may
with regard to the full amount of such generally figure their line 6 tax liability using be subject to penalties.
carryforward. the following items shown on the following You aren’t required to provide the
lines of those forms. All other filers should use information requested on a form that is
For example, a shareholder had an NOL the corresponding lines of other income tax subject to the Paperwork Reduction Act
carryover (originating before 2018) to 2022 of returns. If you haven’t yet filed your return, unless the form displays a valid OMB control
$12,000; $10,000 income to which $10,000 of estimate the line 6 tax liability based on all number. Books or records relating to a form
the NOL can be applied; $2,000 allowable information available to you. or its instructions must be retained as long as
NOL carryover to 2023; and $5,000 deferred
DISC income for 2022. In this case, for 2022 2022 their contents may become material in the
purposes of figuring line 5, the allowed NOL is Form 1040 Form 1120 administration of any Internal Revenue law.
or 1040-SR
$10,000. Note: If 2022 was the last tax year to Line Line Generally, tax returns and return information
are confidential, as required by section 6103.
which the $12,000 NOL (originating before Tax less nonrefundable
2018) could be carried, the full $12,000 NOL credits . . . . . . 22 7, Sch. J The time needed to complete and file this
form will vary depending on individual
5 tax liability. The additional $2,000 loss
would be allowed for purposes of figuring line Plus: (1) Recapture taxes * * circumstances. The estimated burden for
would be entered on line 3. (2) Prior year minimum business taxpayers filing this form is
Other adjustments. In figuring line 3 tax credit . . . 6b, Sch. 3 5d, Sch. J approved under OMB control number
adjustments, take into account any income Less: (1) Alternative minimum 1545-0123 and is included in the estimates
and expense adjustments that don’t result in tax . . . . . 1, Sch. 2 shown in the instructions for their business
amounts that may be carried back or forward (2) Additional child tax income tax return. The estimated burden for
to other tax years. For example, in the case of credit . . . . 28 individual taxpayers filing this form is
an IC-DISC shareholder who is an individual, (3) American approved under OMB control number
the amount of medical expenses allowable as opportunity credit 29 1545-0074 and is included in the estimates
a deduction under section 213 must be (4) Premium tax credit shown in the instructions for their individual
redetermined for purposes of line 3 (Form 8962) . . 9, Sch. 3 income tax return. The estimated burden for
adjustments. (5) Credit for tax paid all other taxpayers who file this form is shown
See Proposed Regulations section on undistributed below.
1.995(f)-1(d) for other details regarding these capital gains (Form Recordkeeping . . . . . 4 hr., 4 min.
and other special computation rules. 2439) . . . . 13a, Sch. 3 20a, Sch. J Learning about the law
*Caution: Only use the portion of Form 1040 or the form . . . . . . 1 hr., 47 min.
Line-by-Line Instructions or 1040-SR, line 24, or Form 1120, Schedule Preparing, copying, and sending
J, line 10, attributable to recapture of credits the form to the IRS . . . 1 hr., 55 min
Line 1. Enter on line 1 the taxable income or allowable against taxes treated as imposed
loss from your federal income tax return for under chapter 1 (for example, recapture of If you have comments concerning the
your tax year that ends with or includes the investment tax and low-income housing accuracy of these time estimates or
IC-DISC’s tax year end. If you haven’t yet filed credits). See section 26(b)(2) for a list of suggestions for making this form simpler, we
your tax return, estimate your income or loss recapture taxes to exclude. would be happy to hear from you. You can
based on all information available to you. See send us comments from
Amended Form 8404, earlier. Line 8. The base period T-bill rate is defined www.irs.gov/FormComments. Or you can
in section 995(f)(4). The base period T-bill rate write to the Internal Revenue Service, Tax
Line 2. Enter the deferred DISC income from is compounded daily based on the number of Forms and Publications, 1111 Constitution
line 10, Part III of Schedule K (Form days in the shareholder’s tax year to Ave. NW, IR-6526, Washington, DC 20224.
1120-IC-DISC), for the IC-DISC tax year that determine the base period T-bill rate factor.
ends with or within your tax year. Don’t send the form to this office. Instead,
The base period T-bill rate factor for 2022 is see Where to file, earlier.
Line 3. Enter the net amount of all section 0.017246634 for a 365-day tax year. Enter the
995(f)(2) adjustments to taxable income. See appropriate factor on line 8 of Form 8404. See
Special Computation Rules , earlier, for details Rev. Rul. 2022-21, 2022-47 I.R.B. 468, for a
on the income (loss) and expense short tax year or a 52-53-week tax year.
adjustments to be made. If more than one
adjustment is involved, attach a statement
listing each item and show the computation of
the net amount.

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