Tennessee Intangible Expense - Notice of Deduction
Extracted from PDF file 2016-tennessee-form-fae-ien.pdf, last modified September 2012
Intangible Expense - Notice of DeductionTennessee Department of Revenue File this form with tax return Intangible Expense – Notice of Deduction (FAE 170 or FAE 174) or email to [email protected] Form IE-N Taxable Year Taxpayer Name Account No/FEIN/SSN Federal Form No. Expense Deducted on Federal Form Line No. Type of Expense Name of Affiliate FEIN This form should only be filed in instances where the intangible expenses paid to the affiliate come within the exceptions or – safe harbors – found at Tenn. Code Ann. § 67-4-2006(b)(2)(N)(i)(a)-(c). If such expenses are paid to more than one affiliate, a separate notice should be completed for each affiliate. Intangible expense, or portion thereof, was: (Check all that apply) (a) Paid, accrued, or incurred to an affiliate in a foreign nation that is a signatory to a comprehensive income tax treaty with the United States; Foreign nation Line 1: Total “Foreign Nation” Deduction (b) Paid, accrued, or incurred to an affiliate when the affiliate during the same taxable year, has directly or indirectly paid, accrued or incurred such portion to an entity that is not an affiliate; Name of non-affiliate FEIN Line 2: Total “Non-Affiliate” Deduction (c) Paid, accrued, or incurred to an affiliate doing business in, or deriving income from, a state that imposes a tax on or measured by net income and, under that state’s law, the affiliate is subject to an income tax in that state. (see instructions for details; State Tax Type / Form Name Amount Ratio Apportioned Amount A ____________ ____________________ __________________ ___________ ________________ B ____________ ____________________ __________________ ___________ ________________ C ____________ ____________________ __________________ ___________ ________________ D ____________ ____________________ __________________ ___________ ________________ Line 3: Total “Tax Paid” Deduction ______________________ (Sum Lines A-D, “Apportioned Amount” column) Line 4: Total Intangible Expense Deduction within Safe Harbors POWER OF ATTORNEY Check YES if this taxpayer’s signature certifies that this tax preparer has the authority to execute this form on behalf of the taxpayer and is authorized to receive and inspect confidential tax information and to perform any and all acts relating to respective tax matters. RV-F1406701 ☐ YES (Sum lines 1-3) _____________________ I certify, under penalty of perjury, that the information provided in and with this form is true and correct to the best of my knowledge and understanding. _____________________________________________ Signature of Taxpayer, Officer or Representative ___________________ Title ______________ Date _____________________________________________ Tax Preparer’s Signature ___________________ Preparer’s PTIN ______________ Date INSTRUCTIONS for FORM IE-N Intangible Expense – Notice of Deduction When to file Form IE-N Form IE-N is a notice that should only be filed in instances where a taxpayer is deducting intangible expenses paid to an affiliate that come within the exceptions – or “safe harbors” – found at Tenn. Code Ann. § 67-4-2006(b)(2)(N)(i)(a)-(c). When one of those three exceptions or safe harbors applies, a taxpayer should deduct such expenses on its franchise, excise tax return, complete this form, and file it with the return. Taxpayers filing the franchise and excise tax return (FAE 170) electronically may file this form (Form IE-N) by email to [email protected] Form IE-N should be completed each year the taxpayer has intangible expenses paid to an affiliate that fall within the exceptions listed below and are being deducted from net earnings or losses. If such expenses are paid to more than one affiliate, a separate Form IE-N should be completed for each affiliate. Definitions "Intangible expense” means an expense related to, or in connection with, the acquisition, use, maintenance, management, ownership, sale, exchange, license, or any other disposition of intangible property, to the extent such amounts are allowed or allowable as deductions or costs in determining federal taxable income on a separate entity basis. "Intangible expense" also means interest expenses directly or indirectly allowed as deductions or costs in determining federal taxable income on a separate entity basis to the extent such interest expenses are directly or indirectly for, related to, or in connection with the direct or indirect acquisition, use, maintenance, management, ownership, sale, exchange, license, or any other disposition of intangible property. "Intangible property" means patents, patent applications, trade names, trademarks, service marks, franchise rights, copyrights, licenses, research, formulas, designs, patterns, processes, formats, and similar types of intangible assets; Intangible Expense Add-Back Tenn. Code Ann. § 67-4-2006(b)(1)(K) requires that all “intangible expenses” paid to an “affiliated business entity” be added to a taxpayer’s net earnings or losses on Schedule J of the franchise and excise tax return. The intangible expenses may be deducted from net earnings or losses on the same tax return under certain circumstances. Failure to make this add-back on the initially-filed return will subject the taxpayer to a negligence penalty in accordance with Tenn. Code Ann. § 67-1-804(b)(2). Exceptions or “Safe Harbors” - Three Types of Intangible Expenses Paid to an Affiliate are Allowed, if reported Public Chapter 842, passed on April 27, 2012, amended Tenn. Code Ann. § 67-4-2006 to allow specific types of intangible expenses to be deducted from the excise tax base. The amendment to Tenn. Code Ann. § 67-4-2006(b)(2)(N)(i)(a)-(c) provides for the deduction of intangible expenses paid to affiliated entities when the intangible expenses come within one of the following safe harbors: a) the affiliate is in a foreign nation that is a signatory to a comprehensive income tax treaty with the United States; b) the affiliate, during the same tax year, has directly or indirectly paid such portion to an entity that is not an affiliate, or c) the affiliate is subject to a state’s income tax and computes the appropriate portion using the allocation or apportionment rules of that state. (This does not apply if the taxpayer and the affiliate file or are included in a combined income tax report or return, a consolidated income tax report or return, or any other report or return of net income that includes the taxpayer and the affiliate and where such return or report results in the affiliate’s intangible income being offset or matched by the taxpayer’s deduction in that state’s report or return.) Instructions for Deducting Intangible Expenses Reported on this Form To ensure that the deduction is correctly taken, the taxpayer should: Complete this form each year it has intangible expenses falling within the safe harbors and file it with the return (or email); Only include intangible expense deductions that fall within the safe harbors; Add back the intangible expense on Schedule J, line 2, of the return; Take the intangible expense deduction computed on Form IE-N, Line 4, on Schedule J, Line 25A, of the return; Check the box on the Sch. J, Line 25A, deduction line, to indicate the deduction is based on Form IE-N – Failure to check the box on Schedule J will prevent the deduction amount from being processed; In computing the “Non-Affiliate” deduction, report and deduct only the amount of intangible expenses paid to its affiliate that are then paid to a non-affiliate; and In computing the “Tax Paid” deduction, list the type of tax paid by the affiliate and the applicable apportionment ratio where requested on the form. DO NOT include states under whose laws the taxpayer and the affiliate file or are included in a combined income tax report or return, a consolidated income tax report or return, or any other report or return of net income that includes the taxpayer and the affiliate and where such return or report results in the affiliate’s intangible income being offset or matched by the taxpayer’s deduction in that state’s report or return. If there are multiple affiliates or additional states, please attach supplemental forms. Failure to file Form IE–N Taxpayers failing to file Form IE-N with the return (or by email) and deducting intangible expenses paid to an affiliate from net earnings or losses will result in the Department's disallowance of the deduction and the taxpayer may be subject to an assessment of excise tax, interest, and penalty, if applicable. The taxpayer may file Form IE-N with an amended return, or send it directly to [email protected] to claim the deduction; however, if the initiallyfiled return did not report the intangible expense add-back on Schedule J, Line 2, the taxpayer will be subject to a negligence penalty as set forth in Tenn. Code Ann. § 67-1-804(b)(2). When to File Form IE-A – Intangible Expense - Application for Approval to Deduct Taxpayers applying to deduct an intangible expense from net earnings or losses that does not qualify for one of the three safe harbors must complete the “Intangible Expense - Application for Approval to Deduct,” Form IE-A. Please review the Instructions on Form IE-A for the details of that process. If a taxpayer has some intangible expenses that fall within the safe harbors and others that do not, the taxpayer will be required to complete both this form (with the return or by email) and Form IE-A (separate from and prior to the filing of the return), including the relevant expenses on each form.
Intangible Expense Notice of Deduction
More about the Tennessee Form FAE-IEN Corporate Income Tax
We last updated the Intangible Expense - Notice of Deduction in February 2017, and the latest form we have available is for tax year 2016. This means that we don't yet have the updated form for the current tax year. Please check this page regularly, as we will post the updated form as soon as it is released by the Tennessee Department of Revenue. You can print other Tennessee tax forms here.
Other Tennessee Corporate Income Tax Forms:
|Form Code||Form Name|
|Form FAE-170||Franchise and Excise Tax Return Kit|
|BUS-Schd-B||Payment to Subcontractor Worksheet - Schedule B|
|Form BUS416-3||Municipal Business Tax Return - Classification 3|
|Form FAE-Qtax||Quarterly Franchise, Excise Tax Declaration|
|Form FAE-CertHousing||Certification - Franchise and Excise Tax Exemption|
Tennessee usually releases forms for the current tax year between January and April. We last updated Tennessee Form FAE-IEN from the Department of Revenue in February 2017.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Tennessee Form FAE-IEN
We have a total of three past-year versions of Form FAE-IEN in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
Intangible Expense Notice of Deduction
Intangible Expense Notice of Deduction
Intangible Expense Notice of Deduction
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