5 Ways To File Irs Form 966 Correctly

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Tax season can be a daunting time for many individuals and businesses. With numerous forms to file and deadlines to meet, it's essential to ensure accuracy and compliance with the Internal Revenue Service (IRS) regulations. One such form that requires attention to detail is the IRS Form 966, Corporate Dissolution or Liquidation. In this article, we will explore the correct ways to file IRS Form 966, highlighting the essential steps and requirements to avoid common mistakes.

Understanding IRS Form 966

IRS Form 966 is used to report the dissolution or liquidation of a corporation. This form is typically filed by corporations that are undergoing liquidation or dissolution, either voluntarily or involuntarily. The form requires detailed information about the corporation's assets, liabilities, and shareholders, making it crucial to ensure accuracy and completeness.

Who Needs to File IRS Form 966?

Corporations that are undergoing liquidation or dissolution must file IRS Form 966. This includes:

• Corporations that are voluntarily dissolving or liquidating
• Corporations that are involuntarily dissolved or liquidated due to court order or other circumstances
• Corporations that are merging with another entity, resulting in the dissolution of the original corporation

5 Ways to File IRS Form 966 Correctly

To ensure compliance with IRS regulations and avoid common mistakes, follow these 5 steps to file IRS Form 966 correctly:

1. Gather Required Information and Documents

Before filing IRS Form 966, gather all necessary information and documents, including:

• Corporation's name, address, and Employer Identification Number (EIN)
• Date of dissolution or liquidation
• List of assets, including their fair market value and any liabilities
• List of shareholders, including their names, addresses, and percentage of ownership
• Detailed financial statements, including balance sheets and income statements

2. Complete Form 966 Accurately

Complete IRS Form 966 accurately, ensuring that all required fields are filled in correctly. This includes:

• Section 1: Corporation's Information
• Section 2: Date of Dissolution or Liquidation
• Section 3: Assets and Liabilities
• Section 4: Shareholders' Information
• Section 5: Financial Statements

3. Attach Required Schedules and Statements

Attach all required schedules and statements to IRS Form 966, including:

• Schedule A: Assets and Liabilities
• Schedule B: Shareholders' Information
• Schedule C: Financial Statements
• Any additional statements or documents required by the IRS

4. Sign and Date the Form

Sign and date IRS Form 966, ensuring that the signature is original and not a photocopy. The form must be signed by an authorized representative of the corporation, such as the CEO or CFO.

5. File the Form on Time

File IRS Form 966 on time, ensuring that it is received by the IRS by the due date. The due date for Form 966 is typically the 15th day of the third month following the date of dissolution or liquidation.

Tips and Reminders

To avoid common mistakes and ensure compliance with IRS regulations, keep the following tips and reminders in mind:

• File IRS Form 966 electronically to ensure accuracy and speed
• Use the correct form version and follow the instructions carefully
• Ensure that all required information and documents are attached
• Double-check the form for accuracy and completeness before filing
• Keep a copy of the filed form and supporting documents for your records

Conclusion

Filing IRS Form 966 correctly requires attention to detail and a thorough understanding of the form's requirements. By following the 5 steps outlined in this article, corporations can ensure compliance with IRS regulations and avoid common mistakes. Remember to gather required information and documents, complete the form accurately, attach required schedules and statements, sign and date the form, and file it on time. By doing so, you can ensure a smooth and successful tax filing process.