What Are the Form 966 Filing Requirements?

Form 966, Corporate Dissolution or Liquidation, is an informational return used to notify the Internal Revenue Service (IRS) that a corporation has adopted a resolution to dissolve or liquidate its stock. Filing this form signals the corporation’s intent to terminate its existence, which allows the IRS to process final tax returns and close the entity’s tax account.

Who Must File Form 966

Any corporation that adopts a resolution or plan to dissolve or liquidate any of its stock must file Form 966. This includes C corporations, S corporations, and limited liability companies (LLCs) that have elected to be taxed as a corporation. The filing is required for both complete and partial liquidations, regardless of whether shareholders recognize a gain or loss.

Certain entities are exempt from this filing. Exempt organizations follow the dissolution procedures for Form 990 or 990-PF, and qualified subchapter S subsidiaries (QSubs) have their own procedures. The form is also not required for a “deemed liquidation,” which can occur when a stock purchase is treated as an asset acquisition under provisions like a Section 338 election.

Information Required for Form 966

To complete Form 966, you must provide the corporation’s legal name, address, and Employer Identification Number (EIN). You also need the date of incorporation and the state or country where it was legally formed.

The form requires the date the resolution or plan for liquidation was adopted. You must enter the IRS service center where the last income tax return was filed, or “e-file” if submitted electronically. You must also provide the end dates for the corporation’s last and final tax years.

You must specify if the plan is for a complete or partial liquidation. If filing as part of a consolidated income tax return, you must provide the parent corporation’s name, EIN, and the service center where that return was filed. A certified copy of the resolution or plan must be attached, and the form must be signed by an authorized corporate officer.

Filing Deadlines and Submission Process

A corporation must file Form 966 within 30 days after adopting the resolution or plan to dissolve or liquidate. If the plan is amended after the initial filing, a new form must be submitted within 30 days of the amendment.

The completed form and attached certified plan must be sent to the IRS service center where the corporation files its income tax return. For example, a corporation that files Form 1120 would use the address specified in that form’s instructions.

Filing Form 966 is an informational step and does not result in a tax payment or refund. The corporation must still file its final income tax return, marking the “final return” box, and fulfill all remaining tax obligations.

Penalties for Non-Compliance

While the IRS does not publicize a specific penalty for the late filing of Form 966, failure to submit it on time can have consequences. Non-compliance may increase the risk of an IRS audit or create other complications during the dissolution process.