Fillable Form 973

What is Form 973?

Form 973, Corporation Claim for Deduction for Consent Dividends, is used by corporations or authorized corporate officers to claim a consent dividend deduction under Section 565 of the Internal Revenue Code (IRC). Section 565 of the Internal Revenue Code (IRC) states that if any individual happens to own any type of consent stock in a corporation on the last day of the taxable year of his or her corporation and he or she agrees in a consent filed with the return of his or her corporation in accordance with the regulations to treat as a dividend the amount that has been specified in such consent, the specified amount will then constitute a consent dividend for purposes of Section 561, Deductions for Dividends Paid.

A complete IRS Tax Form 973 must contain the following information:

• Beginning tax year date
  • Month
  • Year
• Ending tax year date
  • Month
  • Year
• Full name of the corporation
• Employer identification number (EIN)
• Distribution information
  • Class of stock
  • Number of shares outstanding on the first day of the tax year
  • Number of shares outstanding on the last day of the tax year
  • Description of dividend rights
  • Actual distributions per share made in the tax year
• Unequal treatment description
• Outstanding stock changes description
• Amounts unpaid at the beginning of the tax year

The consent dividend provisions will only apply to those corporations that reasonably believe that they are subject to the accumulated earnings tax, personal holding companies, foreign personal holding companies, regulated investment companies, and real estate investment trusts. If the company of a certain individual or authorized corporate officer does not fit the previously stated conditions, he or she will not have to fill out the IRS Tax Form 973.

A consent dividend deduction may only be taken as to the amount stated on Form 972, Consent of Shareholder To Include Specific Amount in Gross Income, for the consent stock of a company or an authorized corporate officer as defined in Section 565 of the Internal Revenue Code (IRC). Moreover, this will not be considered as a preferential dividend as defined in Section 562, Rules Applicable in Determining Dividends Eligible for Dividends Paid Deduction. If it was actually paid by the company or the authorized corporate officer, it will then constitute a dividend as defined in Section 316, Dividend Defined.

To file the IRS Tax Form 973, an individual or an authorized corporate officer must attach the said form to his or her corporation’s income tax return for the current tax year his or her corporation claims the consent dividend deduction. For each shareholder who agreed to treat the consent dividend as a taxable dividend, the corporation must also attach to its income tax return either the signed Form 972, Consent of Shareholder To Include Specific Amount in Gross Income, or an unsigned Form 972 with the same information stated on the signed Form 972. If the corporation or the authorized corporate officer submits an unsigned Form 972, it must retain the original, signed Form 972 in its records.

If the corporation has received an IRS Form 972, Consent of Shareholder To Include Specific Amount in Gross Income, from a nonresident alien or other foreign shareholders, the corporation must pay any withholding tax it would have withheld if the dividend had been actually paid. Corporations or authorized corporate officers must use the following forms to report and send the tax withheld:

• Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
• Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding
• Form 10042-T, Annual Summary and Transmittal of Forms 1042-S

For corporations or authorized corporate officers to see more detailed information on filing and the forms mentioned above and transmitting all of the necessary payment, they must read the instructions stated on these forms.

How to fill out Form 973?

Taxpayers can download and print a PDF copy of IRS Form 973 from the Internal Revenue Service (IRS) website that they can manually complete. They can also fill out IRS Form 973 electronically on PDFRun.

To fill out the IRS 973 Form, you must provide the following information:

For tax year beginning

Enter the date of the beginning tax year.

Month

Enter the month of the beginning tax year.

Year

Enter the beginning year.

Tax year ending

Enter the date of the ending tax year.

Month

Enter the month of the ending tax year.

Year

Enter the ending year.

Name of corporation

Enter the full name of your corporation.

Employer identification number (EIN)

Enter your employer identification number (EIN).

Distribution

The instructions stated below will apply to all of the columns in this section of IRS Tax Form 973.

Class of stock

Enter the class assigned to your stock.

Number of shares outstanding on first day of tax year

Enter the number of outstanding shares on the first day of your tax year.

Number of shares outstanding on last day of tax year

Enter the number of outstanding shares on the last day of your tax year.

Description of dividend rights

Enter all of the important details about your dividend rights.

Actual distributions per share made in tax year

Enter the actual number of distributions per share that have been made in this tax year.

Unequal treatment description

Enter all of the important details about any unequal treatment just in case a distribution was not made on all shares of any available class.

Changes in outstanding stock description

Enter all of the important details about other changes in the outstanding stock during this tax year if there have been any. If you are in need of more space, you may attach more sheets.

Amounts for earlier years unpaid at the beginning of the tax year

Enter the total unpaid amount for the earlier years at the beginning of the tax year if any stock outstanding on the last day of the tax year has been entitled to cumulative dividends. Then, you are required to enter the assigned class of the stocks that are involved. If you are in need of more space, you may attach more sheets.