Changes To Note

• The fund may need to mail its return to a different service center this year because the IRS has changed the filing location for several areas. See Where To File below.
• If the fund wants to allow the IRS to discuss its tax return with the paid preparer who signed it, check the Yes box in the area where the officer of the fund signed the return. See page 2 for details.

How To Get Forms and Publications

Personal computer.   You can access the IRS Web Site 24 hours a day, 7 days a week, at www.irs.gov to:

• Download forms, instructions, and publications.
• See answers to frequently asked tax questions.
• Search publications on-line by topic or keyword.
• Send us comments or request help by e-mail.
• Sign up to receive local and national tax news by e-mail.

You can also reach us using file transfer protocol at ftp.irs.gov.

CD-ROM.   Order Pub. 1796, Federal Tax Products on CD-ROM, and get:

• Current year forms, instructions, and publications.
• Prior year forms, instructions, and publications.
• Frequently requested tax forms that may be filled in electronically, printed out for submission, and saved for recordkeeping.
• The Internal Revenue Bulletin.

Buy the CD-ROM on the Internet at www.irs.gov/cdorders from the National Technical Information Service (NTIS) for $21 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD-ROM for $21 (plus a $5 handling fee).

By phone and in person.   You can order forms and publications 24 hours a day, 7 days a week, by calling 1-800-TAX-FORM (1-800-829-3676). You can also get most forms and publications at your local IRS office.

General Instructions

Purpose of Form

Nuclear decommissioning funds file Form 1120-ND to report contributions received, income earned, the administrative expenses of operating the fund, and the tax on modified gross income. If there are initial taxes on self-dealing with the fund, the return is also used to report and pay the section 4951 taxes on self-dealing.

Who Must File

All section 468A nuclear decommissioning funds must file Form 1120-ND. A disqualified person engaging in self-dealing must file Form 1120-ND to report the initial tax under section 4951.

Initial taxes on self-dealing.   A disqualified person or a trustee who participates in an act of self-dealing must file Form 1120-ND. See the instructions on page 3 for computing the amount of tax for trustees and disqualified persons.

Complete the following items if you are computing tax due to acts of self-dealing:

• The heading (omitting the checkboxes for final return, name change, address change, and amended return);
• The signature and, if applicable, the paid preparer's section;
• Item 5, Schedule M, Other Information; and
• The appropriate lines in Part II, Sections A and B.

Each person liable for filing a return to pay any tax reportable on this form must file a separate return.

When To File

Generally, a fund must file its income tax return by the 15th day of the 3rd month after the end of the fund's tax year. The return of a trustee or self-dealer who owes tax under section 4951 must be filed by the 15th day of the 3rd month after the end of the tax year of the trustee or self-dealer.

If the due date falls on a Saturday, Sunday, or legal holiday, the fund may file on the next business day.

Where To File

File the corporation's return at the applicable IRS address listed below.

If the fund's principal business, office, or agency is located in:	And the total assets at the end of the tax year (Form 1120-ND, Schedule L, line 6, Column (b)) are:	Use the following Internal Revenue Service Center address:
Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia, Wisconsin	Less than $10 million $10 million or more	Cincinnati, OH 45999-0012 Ogden, UT 84201-0012
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, Wyoming	Any amount	Ogden, UT 84201-0012

Private delivery services.   Funds can use certain private delivery services designated by the IRS to meet the timely mailing as timely filing/paying rule for tax returns and payments. The most recent list of designated private delivery services was published by the IRS in October 2001.

The list includes only the following:

• Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, Second Day Service.
• DHL Worldwide Express (DHL): DHL Same Day Service, DHL USA Overnight.
• Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day.
• United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.

Extension.   File Form 7004, Application for Automatic Extension of Time To File Corporation Income Tax Return, to request a 6-month extension of time to file.

A self-dealer or trustee filing to report section 4951 taxes must file Form 2758, Application for Extension of Time To File Certain Excise, Income, Information, and Other Returns, to request an extension of time to file.

An extension of time to file does not extend the time for payment of tax.

Electing taxpayer.   The term electing taxpayer means an eligible taxpayer that elects the application of section 468A under the rules contained in Regulations section 1.468A-7.

Also, report acts of self-dealing based on the tax year of the self-dealer. See Rev. Rul. 75-391, 1975-2 C.B. 446, for details.

Who Must Sign

The return must be signed and dated by an authorized trustee. The return of any person who engaged in any act of self-dealing must be signed and dated by that person or the individual authorized to sign on behalf of that person.

If an employee of the fund completes Form 1120-ND, the paid preparer's space should remain blank. In addition, anyone who prepares Form 1120-ND but does not charge the fund should not complete that section. Generally, anyone who is paid to prepare the return must sign it and fill in the Paid Preparer's Use Only area.

The paid preparer must complete the required preparer information and:

• Sign the return, by hand, in the space provided for the preparer's signature (signature stamps and labels are not acceptable).
• Give a copy of the return to the taxpayer.

Paid Preparer Authorization

If the fund wants to allow the IRS to discuss its tax return with the paid preparer who signed it, check the Yes box in the signature area of the return. This authorization applies only to the individual whose signature appears in the Paid Preparer's Use Only section of the fund's return. It does not apply to the firm, if any, shown in that section.

If the Yes box is checked, the fund is authorizing the IRS to call the paid preparer to answer any questions that may arise during the processing of its return. The fund is also authorizing the paid preparer to:

• Give the IRS any information that is missing from its return,
• Call the IRS for information about the processing of the fund's return or the status of its refund or payment(s), and
• Respond to certain IRS notices that the fund has shared with the preparer about math errors, offsets, and return preparation. The notices will not be sent to the preparer.

The fund is not authorizing the paid preparer to receive any refund check, bind the fund to anything (including any additional tax liability), or otherwise represent the fund before the IRS. If the fund wants to expand the paid preparer's authorization, see Pub. 947, Practice Before the IRS and Power of Attorney.

The authorization cannot be revoked. However, the authorization will automatically end no later than the due date (without regard to extensions) for filing the fund's tax return for the following year.

Assembling the Return

Attach schedules in alphabetical order and other forms in numerical order after Form 1120-ND.

Complete every applicable entry space on Form 1120-ND. Do not write See Attached instead of completing the entry spaces. If more space is needed on the forms or schedules, attach separate sheets using the same size and format as on the printed forms. If there are supporting statements and attachments, arrange them in the same order as the schedules or forms they support and attach them last. Show the totals on the printed forms. Also, be sure to enter the fund's name and employer identification number (EIN) on each supporting statement or attachment.

Accounting Method

The fund must use the same method of accounting as the electing taxpayer.

Rounding Off to Whole Dollars

The fund may show amounts on the return and accompanying schedules as whole dollars. To do so, drop amounts less than 50 cents and increase any amount from 50 cents to 99 cents to the next higher dollar.

Recordkeeping

Keep the fund's records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Usually, records that support an item of income, deduction, or credit on the return must be kept for 3 years from the date the return is due or filed, whichever is later. Keep records that verify the fund's basis in property as long as they are needed to figure the basis of the original or replacement property.

The fund should keep copies of any returns filed. They help in preparing future and amended returns.

Depository Method of Tax Payment

The fund must pay the tax due in full no later than the 15th day of the 3rd month after the end of the tax year. The two methods of depositing fund income taxes are discussed below.

Electronic Deposit Requirement

The fund must make electronic deposits of all depository taxes (such as employment tax, excise tax, and fund income tax) after December 31 of the calendar year following any calendar year in which the fund deposited more than $200,000 of such taxes. Once the fund is required to use the Electronic Federal Tax Payment System (EFTPS), it must continue to use EFTPS in all later years.

If the fund is required to use EFTPS and fails to do so, it may be subject to a 10% penalty. If the fund is not required to use EFTPS, it may participate voluntarily. To enroll in or get more information about EFTPS, call 1-800-555-4477 or 1-800-945-8400. To enroll online, visit www.eftps.gov.

Depositing on time.   For EFTPS deposits to be made timely, the fund must initiate the transaction at least 1 business day before the date the deposit is due.

Deposits With Form 8109

If the fund does not use EFTPS, deposit fund income tax payments (and estimated tax payments) with Form 8109, Federal Tax Deposit Coupon. If you do not have a preprinted Form 8109, use Form 8109-B to make deposits. You can get this form by calling 1-800-829-1040. Be sure to have your EIN ready when you call.

Do not send deposits directly to an IRS office; otherwise, the fund may have to pay a penalty. Mail or deliver the completed Form 8109 with the payment to an authorized depository (i.e., a commercial bank or other financial institution authorized to accept Federal tax deposits). Make checks or money orders payable to that depositary.

To help ensure proper crediting, write the fund's EIN, the tax period to which the deposit applies, and Form 1120-ND on your check or money order. Be sure to darken the 1120 box on the coupon. Records of these deposits will be sent to the IRS.

If the fund prefers, it may mail the coupon and payment to: Financial Agent, Federal Tax Deposit Processing, P.O. Box 970030, St. Louis, MO 63197. Make the check or money order payable to Financial Agent.

For more information on deposits, see the coupon booklet (Form 8109) and Pub. 583, Starting a Business and Keeping Records.

If the fund owes tax when it files Form 1120-ND, do not include the payment with the return. Instead, mail or deliver the payment with Form 8109 to a qualified depositary, or use EFTPS, if applicable.

Estimated Tax Payments

Generally, the following rules apply to the fund's payments of estimated tax.

• A fund must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more.
• The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next business day.
• Figure the fund's expected modified gross income for the tax year. Then multiply the fund's expected modified gross income by 20% and see Form 1120-W, Estimated Tax for Corporations, to determine the fund's required installments.
• If the Fund does not use EFTPS, use the deposit coupons (Form 8109) to make deposits of estimated tax.

For more information on estimated tax payments, including penalties that apply if the fund fails to make the required payments, see the instructions for line 15 on page 3.

Overpaid estimated tax.   If the fund overpaid estimated tax, it may be able to get a quick refund by filing Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax. The overpayment must be at least 10% of the fund's expected income tax liability and at least $500. File Form 4466 before the 16th day of the 3rd month after the end of the tax year, but before the fund files its income tax return. Do not file Form 4466 before the end of the fund's tax year.

Interest and Penalties

Interest.   Interest is charged on taxes paid late even if an extension of time to file is granted. Interest is also charged on penalties imposed for failure to file, negligence, fraud, gross valuation overstatements, and substantial understatements of tax from the due date (including extensions) to the date of payment. The interest charge is figured at a rate determined under section 6621.

Penalty for late filing of return.   A fund that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. The minimum penalty for a return that is more than 60 days late is the smaller of the tax due or $100. The penalty will not be imposed if the fund can show that the failure to file on time was due to reasonable cause. Funds that file late must attach a statement explaining the reasonable cause.

Penalty for late payment of tax.   A fund that does not pay the tax when due may have to pay a penalty of ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. The penalty will not be imposed if the fund can show that the failure to pay was due to reasonable cause.

Other penalties.   Other penalties can be imposed for negligence, substantial understatement of tax, and fraud. See sections 6662 and 6663.

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