- quote -

Assuming you did the correct thing and never recognized the
penalty as an expense, it is not income either when abated.
It would be shown as a reconciling item between book and tax
income as an item of book income but not subject to federal
income tax.

- quote -

First the interest - show it as current year interest
income. As for the refund, you should have setup a
receivable account when the tax return was prepared. It
should only affect the balance sheet. If the refund was
somehow unexpected, it is theoretically a prior period
adjustment but, unless material, I would reduce current year
tax. This is not pure accounting, but it is how things are
often done.

I am sure there are a few anal-retentive types that will
take issue with this - but I assume we are not talking
General Motors.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Hello all.
I'd like to know the following:

A company has until 10/15/2006 to file their 2005 corporate
form 1120 tax return.

1) If the company made an IRS filing penalty payment in 2005
where does this penalty payment amount get reflected, on
Schedule M-1?
2) In 2005 the company received a refund from y/e 2004.
Where does the refund amount get listed and also where does
the interest amount get reported?

Thanks.
Walter

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >