Find out what takes place in the formation of a corporation and the resulting tax responsibilities and required forms. Corporations file Schedule M-3 (Form 1120) to answer questions about their financial statements and reconcile financial statement net income (loss)Corp treatment avoids doubletaxation. It is generally the best choice for small businesses. WHO MUST FILE: Every corporation subject to the tax on all or part of its net profits must make estimated income tax payments using Form CF-1120ES.