US C-CORP OPERATIONAL COMPLIANCE CHECKLIST

Monthly | Quarterly | Annual Tax & Governance Compliance Requirements

INTRODUCTION

This Compliance Checklist establishes mandatory operational & tax compliance requirements for US C-Corporations per IRC §11 (Corporate Tax), IRC §1120 (Form 1120 Filing), IRC §6012 (Return Filing Requirements), DGCL §141 (Board Governance).

MONTHLY TASKS

FINANCIAL MANAGEMENT: Per IRC §162 (Business Deductions):

Reconcile corporate bank account (all deposits/withdrawals)
Review accounts receivable (outstanding invoices)
Review accounts payable (bills due/unpaid)
Document business expenses (receipts, invoices for deduction eligibility)
Verify no commingling personal/business funds (liability protection)
Maintain detailed records per IRC §6001(a) - IRS can audit 3 years back (6 years if >25% income underreported)

PAYROLL (IF EMPLOYEES): Per IRC §3102 (Payroll Tax Withholding):
Process payroll (bi-weekly or per schedule)
Withhold income tax (federal + state)
Withhold FICA (6.2% Social Security + 1.45% Medicare per §3102)
Pay employer matching (6.2% + 1.45% per §3111)
Verify I-9 compliance (employment eligibility verification)
Quarterly deposited via EFTPS (Electronic Federal Tax Payment System) - failure = significant penalties per IRC §6656

QUARTERLY TASKS

TAX PLANNING & PAYMENTS: Per IRC §6655 (Estimated Tax Payments):

Calculate quarterly estimated tax (Form 1120-ES)
Pay estimated tax by deadline: Apr 15, Jun 15, Sep 15, Jan 15 per §6655(e)
Verify withholding accuracy (compare to estimated liability)
Review quarterly financial statements (P&L, balance sheet)
Prepare quarterly tax provision (deferred tax estimate)
Failure to pay quarterly penalties = 8% annual rate per §6655(h) - even if refund due at year-end

CORPORATE GOVERNANCE: Per DGCL §141 (Board Meetings):
Hold Board Meeting (at least quarterly recommended)
Document Board Minutes (actions, decisions, voting records per §141(e))
Document Board Resolutions (major decisions: hiring, contracts, dividends)
Verify officers' authority (corporate records up-to-date)
Review Conflict of Interest (directors disclose per DGCL §144)
Minutes required for D&O insurance claims & litigation defense (business judgment rule protection per DGCL §141(b))

COMPLIANCE & LICENSING: Per DGCL §102 (State Reporting):
Delaware Annual Report filing (if incorporated in DE per §9013)
Sales tax collected & remitted (by state per state law)
Payroll tax deposits (EFTPS payment verification)
Verify business licenses (current & non-expired)

ANNUAL TASKS

FEDERAL TAX FILINGS: Per IRC §6012 (Filing Requirements):

File Form 1120 (Corporate Tax Return) by Mar 15 OR Oct 15 with 6-month extension per §6012(a)
Attach Schedule C (net income/loss if sole proprietor before incorporation)
Attach K-1 Schedule (if partnership/S-corp interests held)
Tax return must show: revenue, COGS, expenses, taxable income per §63
Pay corporate income tax (21% federal rate per IRC §11 TCJA 2017)
Claim all business deductions (IRC §162 - wages, rent, supplies, depreciation per §167)
IRS scrutiny: Ensure deductions substantiated (keep receipts 7 years per IRC §6001). Deduction limitations: Meals/entertainment 50% per §274(n), Officer compensation "reasonable" per §162(a)(1)

STATE TAX FILINGS: Per State Corporate Tax Law:
State Corporate Income Tax Return (if applicable by state)
State Franchise Tax (some states - Ohio, Texas, gross receipts tax)
Annual Report to Secretary of State (if state requires)
Verify pass-through entity tax (PTET) if elected per state law
Sales Tax Annual Report (reconciliation of quarterly payments)

PAYROLL & EMPLOYMENT: Per IRC §6001 (Record-Keeping):
File Form 941 (Employer Quarterly Federal Tax Return) - 4 times/year or via EFTPS
File Form W-2 (for each employee by Jan 31 per §6001(a), 3 copies + SSA copy)
File Form 1099-NEC (for contractors ≥$600 income per IRC §6041)
File Form 1099-MISC (for other payments ≥$600 per §6041(a))
File Form 1096 (transmittal of 1099s to IRS by Feb 28)
Provide W-2s to employees (by Jan 31 per IRC §6051)
Penalties: Missing W-2 = $100+ per form per IRC §6721; failure to withhold = 100% of taxes owed per §6672

AUDIT & RECORD REVIEW:
Conduct annual internal audit (reconcile subsidiary ledgers)
Verify fixed asset register (depreciation per IRC §167, MACRS)
Review inventory valuation (FIFO/LIFO method consistency per IRC §471)
Prepare tax provision (deferred tax assets/liabilities per GAAP)
Obtain CPA audit letter (if revenues >$50M per PCAOB standards)

SHAREHOLDER & GOVERNANCE: Per DGCL §211 (Annual Meeting):
Hold Annual Shareholder Meeting (per bylaws, typically once/year)
Document Annual Minutes (actions taken, elections held)
Distribute Annual Report to shareholders (financial statements)
Elect Board of Directors (per proxy voting if public per §211(b))
Approve executive compensation (peer review, reasonableness per §162(a))
Review D&O insurance (coverage adequacy per company size)
Shareholder voting records (proxy voting, consent forms) required for audit trail - retain 7 years per §6001

ENVIRONMENTAL & REGULATORY:
EPA compliance (if manufacturing - discharge permits, clean air act)
OSHA compliance (if employees - workplace safety records)
SOX compliance (if public company - Sarbanes-Oxley internal controls per 15 USC §7262)
Industry-specific regulations (fintech, healthcare, securities licensing)

CRITICAL PENALTIES & DEADLINES

FAILURE TO FILE: Per IRC §6651:
• Form 1120 late: 5% per month (max 25%) + interest @ 8% annual per §6601
• Form 941 late: 2-10% of tax due per §6651(a)(2)
• Form W-2 late: $100+ per form per §6721(a)
FAILURE TO PAY: Per IRC §6651(b):
• Tax unpaid: 0.5% per month (max 25%) + interest per §6601
• Underpayment of estimated tax: 8% penalty per §6655(g)
• Payroll tax not withheld: 100% penalty per §6672(a) (personally liable)

CRITICAL COMPLIANCE ISSUES: File Form 1120 by Mar 15 (or Oct 15 with extension) per IRC §6012. Pay quarterly estimated taxes (Apr, Jun, Sep, Jan 15 per §6655) - failure = 8% penalty. Hold annual shareholder meeting + quarterly Board meetings per DGCL §141 + §211. Document all meetings/resolutions (required for D&O insurance defense). Reconcile monthly (prevent commingling funds - liability protection). Pay payroll taxes quarterly via EFTPS (100% penalty if not withheld per §6672). File W-2s by Jan 31 per §6051; 1099s by Feb 28 per §6041. Delaware Annual Report if DE-incorporated per §9013. Deductions must be substantiated (IRC §162) - keep 7 years. Estimated tax penalty harsh (8% even if refund due at year-end per §6655(h)). Form 1120 fines escalate: 5% per month late = 25% max per §6651(a)(1).