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IC-DISC

An IC-DISC, Interest Charge Domestic International Sales Corporation, is a federal income tax incentive that allows U.S. exporters (making or distributing U.S. manufactured, produced, grown or extracted products) to compete globally by reducing U.S. tax related to export profits.

The IC-DISC provides permanent federal income tax savings ranging from 5.8% to 21% depending upon the facts. Benefits are greatly enhanced when the IC-DISC commission is maximized. Maximizing the IC-DISC commission is usually synonymous with performing a Transaction by Transaction (TxT) calculation. At WTP Advisors, we’ve performed thousands of TxT calculations resulting in millions of dollars of sustained permanent cash savings for our clients. To date, all of our computations have been accepted by the IRS, most without any challenge whatsoever.

To find out more about the IC-DISC, please see What is an IC-DISC?

If you would like to learn more about the services WTP Advisors can provide your company; or see some real-life examples of how an IC-DISC provides real tax savings to an exporter, please see Services and Case Studies page.

Contact Us IC-DISC Services and Case Studies

Frequently Asked Questions

An IC-DISC is a U.S. tax incentive structure that allows exporters to defer income and benefit from reduced tax rates on export profits.

Any U.S. company producing or reselling goods manufactured in the U.S. and destined for export may qualify, subject to IRS requirements.

Shareholders benefit by converting ordinary income into qualified dividends, typically taxed at lower rates.

No operational changes are required; it is primarily a paper entity established for tax benefits.

The entity must file Form 1120-IC-DISC and maintain detailed records to substantiate qualifying export receipts.

A notional interest charge applies to deferred tax liability, ensuring that benefits are balanced with IRS safeguards.

Goods must be manufactured, produced, grown, or extracted in the U.S., with over 50% of value added domestically.

Generally, services are excluded, but certain architectural and engineering services for foreign construction projects may qualify.

IC-DISCs can significantly improve after-tax cash flow, making them particularly advantageous for SMEs engaged in global trade.

Risks are minimal if compliance is maintained, but misclassification of receipts or poor recordkeeping may trigger penalties.