Instructions for Form 1120-FSC - U.S. Income Tax Return of a Foreign Sales Corporation

Oct 3, 2026

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Instructions for IRS Form 1120-FSC outline how a Foreign Sales Corporation should report income, gains, losses, deductions, and credits, and determine U.S. income tax liability. The material explains FSC repeal and extraterritorial income exclusion rules, filing and signing requirements, recordkeeping, payment and estimated tax procedures, and how to handle specific schedules. It also includes guidance for unresolved tax issues and how to obtain IRS forms and publications.

LanguageEnglish

CategoryExam

FormatPDF

Pages16

Reading Time40 min

AccessFree to download

Photographs of Missing Children

Unresolved Tax Issues

How To Get Forms and Publications

General Instructions

Purpose of Form

FSC Repeal and Extraterritorial Income Exclusion

FSC Rules

Who Must File

When To File

Where To File

Who Must Sign

Paid Preparer Authorization

Other Forms, Schedules, and Statements That May Be Required

Assembling the Return

Accounting Methods

Accounting Periods

Rounding Off To Whole Dollars

Recordkeeping

Payment of Tax Due

Estimated Tax Payments

Interest and Penalties

Specific Instructions

Tax and Payments

Schedule A–Cost of Goods Sold Related To Foreign Trading Gross Receipts

Schedule B–Taxable Income or (Loss)

Schedule E–Exemption Percentages Used in Figuring Exempt Foreign Trade Income

Schedule F–Net Income From Nonexempt Foreign Trade Income and Taxable Nonforeign Trade Income

Schedule G–Deductions Allocated or Apportioned to Foreign Trade Income Other Than Foreign Trade Income Reported on Schedule F

Schedule J–Tax Computation

Schedule L–Balance Sheets per Books

Schedule M-1

Principal Business Activity Codes

Department of the Treasury Internal Revenue Service Instructions for Form 1120-FSC U.S . Income Tax Return of a Foreign Sales Corporation Section references are to the Internal Revenue Code unless otherwise noted. Contents Page Photographs of Missing Children .... 1 Unresolved Tax Issues ............ 1 How To Get Forms and Publications .................. 1 General Instructions ............. 2 Purpose of Form ............... 2 FSC Repeal and Extraterritorial Income Exclusion .................. 2 FSC Rules .................. 2-4 Who Must File ................ 4 When To File ................. 4 Where To File ................. 4 Who Must Sign ................ 4 Paid Preparer Authorization ....... 4 Other Forms, Schedules, and Statements That May Be Required .................. 4-5 Assembling the Return .......... 5 Accounting Methods ............ 6 Accounting Periods ............. 6 Rounding Off To Whole Dollars .................... 6 Recordkeeping ................ 6 Payment of Tax Due ........... 6-7 Estimated Tax Payments ......... 7 Interest and Penalties ........... 7 Specific Instructions ............ 7 Tax and Payments ............. 8 Schedule A–Cost of Goods Sold Related To Foreign Trading Gross Receipts ....... 8-9 Additional Information ......... 9-10 Schedule B–Taxable Income or (Loss) .................. 10 Schedule E–Exemption Percentages Used in Figuring Exempt Foreign Trade Income .............. 10 Schedule F–Net Income From Nonexempt Foreign Trade Income and Taxable Nonforeign Trade Income 10-12 Schedule G–Deductions Allocated or Apportioned to Foreign Trade Income Other Than Foreign Trade Income Reported on Schedule F .... 12-13 Schedule J–Tax Computation . 13-14 Schedule L–Balance Sheets per Books ................. 14 Schedule M-1 ................ 14 Principal Business Activity Codes .................... 16 Photographs of Missing Children The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Unresolved Tax Issues If the FSC has attempted to deal with an IRS problem unsuccessfully, it should contact the Taxpayer Advocate. The Taxpayer Advocate independently represents the FSC’s interests and concerns within the IRS by protecting its rights and resolving problems that have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that the FSC’s case is given a complete and impartial review. The FSC’s assigned personal advocate will listen to its point of view andwill work with the FSC to address its concerns. The FSC can expect the advocate to provide: • A “fresh look” at a new or on-going problem. • Timely acknowledgment. • The name and phone number of the individual assigned to its case. • Updates on progress. • Timeframes for action. • Speedy resolution. • Courteous service. When contacting the Taxpayer Advocate, the FSC should be prepared to provide the following information: • The FSC’s name, address, and employer identification number (EIN) . • The name and telephone number of an authorized contact person and the hours he or she can be reached. • The type of tax return and year(s) involved. • A detailed description of the problem. • Previous attempts to solve the problem and the office that was contacted. • A description of the hardship the FSCis facing (if applicable) . The FSC may contact a Taxpayer Advocate by calling 1-877-777-4778 (toll free) . Persons who have access to TTY/ TDD equipment may call 1-800-829-4059 and ask for Taxpayer

FAQs

What is the purpose of Form 1120-FSC?

Form 1120-FSC is used to report a Foreign Sales Corporation’s income, gains, losses, deductions, and credits, and to figure its income tax liability.

What does the FSC repeal and extraterritorial income exclusion rule cover?

In general, the FSC Repeal and Extraterritorial Income Exclusion Act of 2000 repealed the FSC rule, as described in the instructions.

How can an FSC get help for unresolved tax issues with the IRS?

If the FSC tried to resolve an IRS problem unsuccessfully, it should contact the Taxpayer Advocate. The advocate represents the FSC’s interests within the IRS, provides a fresh look, acknowledgment, updates, timeframes, and can help ensure a complete and impartial review.

Oct 3, 2026

Upload by ahduag