IC-DISC

About IC-DISC

The Interest Charge-Domestic International Sales Corporation (IC-DISC) is the last surviving federal tax benefit for privately-held exporters in the United States. The IC-DISC was originally created by Congress to promote export sales by allowing companies to defer income, with interest charged on the deferred tax.

Exporters that don’t currently have an IC-DISC in place are missing the opportunity to significantly reduce their federal income tax burden each year. The IC-DISC provides U.S. exporters and their shareholders permanent tax savings— 19.6 percent of net export income.

Benefits you’ll love

Carrazco’s competitive strength resides in its people, methods, and tools. Our professional team is talented, credentialed and driven to succeed.

Recurring permanent tax savings for shareholders

Typically high benefits relative to costs

Deferral mechanism when earnings are not distributed out of IC-DISC

The ability to tax efficiently, which helps manage cash flow

Potential retirement planning flexibility

Analysis of allocation and apportionment methodologies

Multi-dimensional profitability analysis, useful in business review

And More

How it works

The owner of the operating company forms a tax-exempt IC-DISC. The IC-DISC must maintain its own bank account, accounting records and file U.S. tax returns, but otherwise there are no changes to business operations.

The operating company pays a tax deductible commission to the IC-DISC equal to at least 4% of operating company’s gross receipts from qualified exports or 50% of the operating company’s net income from qualified exports.
The operating company expenses the commission and reduces ordinary income taxed at a maximum 39.6% rate.
The IC-DISC is tax exempt and is not taxed on the commission income it receives from the operating company.
The IC-DISC pays dividends to its shareholders, which are taxed at a 20% rate.
The result yields a 19.6% permanent tax rate arbitrage (39.6% ordinary rate less 20% dividend rate).

NET EFFECT

Over 100 industry companies trust us

As a rapidly growing Company, we were beginning to see the dramatic tax consequences of our growth and good fortune. In lieu of our growing tax liabilities we engaged Carrazco and our expectations were dramatically exceeded. Through their Innovative Tax Strategies, Carrazco secured hundreds of thousands of dollars in tax savings for our Company. Needless to say, RB Spencer is proud to have a business relationship with a Firm that delivers on their promises.”

BOB SPENCER

President - RB Spencer, Inc

Carrazco - Innovative Tax Solutions thoroughly analyzed current and future tax saving opportunities as well as prior year possibilities. By implementing Carrazco's Innovative Tax Strategies our company was able to realize over $200K in tax refunds and future offsets, increasing company cash flow and dramatically improving our bottom line.

RYAN ROGERS

Lakeview Petroleum

Although we had some understanding of the tax incentives available through the Yuba-Sutter Enterprise Zone, we had never thoroughly pursued it under the impression that our Company was too small to benefit. That changed when we met the folks at Carrazco who guided us to take full advantage of the benefits we were entitled. Carrazco's business philosophy of ”No Results, No Fee” made it so we had nothing to lose and everything to gain. The process was efficiently streamlined to make things simple...the results, on the other hand, were extraordinary!

RANDY FLETCHER

Fletcher Insurance Services, Inc.