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Form 966 Corporate Dissolution or Liquidation is the IRS form that must be filled out when closing down an S corporation. In this situation, you are responsible for notifying all relevant federal, state, and local government agencies and completing all IRS reporting requirements.
There is no direct Form 966 penalty for non-filing or late filing, but by not properly notifying the IRS of a dissolution or liquidation, it may result in collateral damage and other penalties.
As provided by the IRS: ?A corporation (or a farmer's cooperative) must file Form 966 if it adopts a resolution or plan to dissolve the corporation or liquidate any of its stock. Exempt organizations and qualified subchapter S subsidiaries should not file Form 966.
Resolve financial obligations. Handle final returns for income tax and sales tax. Cancel your Employer Identification Number, notify federal and state tax agencies, and follow this checklist from the IRS with instructions on how to close your business. Maintain records.
Regardless of whether or not an EIN was ever used, the number is PERMANENT. The IRS cannot cancel EIN numbers; however, the business account associated with the EIN may be closed.