Shareholders of S Corporations with outstanding section 965(i) net tax liabilities must file Form 965-E to obtain consent to make a section 965(h) election within 30 days of a section 965(i)(2)(A)(ii) triggering event.
What is Form 965-E?
Form 965-E provides an S Corporation shareholder with an outstanding section 965(i) net tax liability with respect to which a section 965(i)(2)(A)(ii) triggering event has occurred a way to obtain consent to make a section 965(h) election. Instructions on how to file the form by the due date can be found on the form and must be done within 30 days of the event. Those who fail to properly make the section 965(h) election or make any material misrepresentation or material omission will be required to pay the full amount of the section 965(i) net tax liability with respect to which the triggering event occurred.
IRS Form 965-E – Who Needs to Fill It Out?
IRS Form 965-E needs to be filled out by an S corporation shareholder who has an outstanding section 965(i) net tax liability with respect to which a section 965(i)(2)(A)(ii) triggering event has occurred in order to obtain consent to make a section 965(h) election. The original form must be mailed to the IRS’s Memphis Compliance Service Collection Operations within 30 days of the triggering event. The shareholder must also attach a duplicate copy of the form to their tax return for the year of the event, filed by the due date (including extensions). No extensions of time are granted to file this form, and failure to do so within 30 days may result in the full amount of the liability becoming due and payable.
Step-by-Step: Form 965-E Instructions For Filling Out the Document
To fill out Form 965-E, you must be an S corporation shareholder with an outstanding section 965(i) net tax liability, and a section 965(i)(2)(A)(ii) triggering event must have occurred. You must mail the original form to the IRS’s Memphis Compliance Service Collection Operations within 30 days of the triggering event, and attach a duplicate copy of the form to your tax return for the same tax year. Failure to meet these requirements could result in the consent agreement being rejected and you being required to pay the entire amount of the section 965(i) net tax liability. After completing the form, you must make a separate section 965(h) election in accordance with the requirements in Regulations section 1.965-7(c)(3)(v)(b)(2).
Below, we present a table that will help you understand how to fill out Form 965-E.
| Requirement for Form 965-E | Details |
|---|---|
| S Corporation Shareholder | An individual must be an S corporation shareholder. |
| Section 965(i) Net Tax Liability | Outstanding section 965(i) net tax liability is required. |
| Triggering Event | A section 965(i)(2)(A)(ii) triggering event must have occurred. |
| Submission Deadline | Form must be mailed to IRS’s Memphis Compliance Service Collection Operations within 30 days of the triggering event. |
| Attachment to Tax Return | A duplicate copy of the form must be attached to the tax return for the same tax year. |
| Consequences of Failure | Failure to meet these requirements could result in the consent agreement being rejected, and the taxpayer may be required to pay the entire amount of the section 965(i) net tax liability. |
| Section 965(h) Election | After completing the form, a separate section 965(h) election must be made following the requirements in Regulations section 1.965-7(c)(3)(v)(b)(2). |
Do You Need to File Form 965-E Each Year?
No – Form 965-E seeks to obtain consent for an S Corporation shareholder to make a Section 965(h) election when a Section 965(i)(2)(A)(ii) triggering event, such as an S Corp liquidation, sale, exchange, or cessation of business, has occurred. S Corporation shareholders must file Form 965-E within 30 days of the triggering event. The form, along with a duplicate copy, must be mailed to the IRS in Memphis and attached to the generally-filed tax return for the year in which the triggering event occurred. No extensions for late filing are granted, so S Corporation shareholders must timely file in order to obtain this consent.
Download the official IRS Form 965-E PDF
On the official IRS website, you will find a link to download Form 965-E. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 965-E
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