PDF document

- 1 -

Userid: CPM Schema: instrx Leadpct: 100% Pt. size: 9 Draft Ok to Print
AH XSL/XML Fileid: … ns/I965A/202001/A/XML/Cycle04/source (Init. & Date) _______

Page 1 of 5 13:06 - 25-Jan-2020

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Department of the Treasury
Internal Revenue Service
Instructions for Form 965-A

(Rev. January 2020)
Individual Report of Net 965 Tax Liability

Section references are to the Internal Revenue Code unless determination of a taxpayer’s net 965 tax liability, whether or not
otherwise noted. to be paid in installments; the payments of a net 965 tax liability
to be paid in installments; adjustments of any net 965 tax
liabilities outstanding, including any net 965 tax liability of the
Future Developments taxpayer that has been assumed by another taxpayer or any net
For the latest information about developments related to Form 965 tax liability that the taxpayer has assumed; an S corporation
965-A and its instructions, such as legislation enacted after they shareholder’s net 965 tax liability with respect to an S
were published, go to IRS.gov/Form965A. corporation, whether or not to be deferred; and the beginning
balance of, adjustments to, and ending balance of any deferred
net 965 tax liabilities with respect to an S corporation. In
What’s New summary, this form is intended to be a cumulative report of a
In Parts I, II, and III of the form, line 3 is now designated for use taxpayer’s net 965 tax liabilities through payment in full. This
for 2019 reporting. form must be completed by a taxpayer for every tax year for
The IRS has developed the following new forms: which the taxpayer has any net 965 tax liability outstanding and
• Form 965-C, Transfer Agreement Under Section 965(h)(3). not fully paid at any point during the tax year, including deferred
• Form 965-D, Transfer Agreement Under Section 965(i)(2). net 965 tax liabilities with respect to an S corporation.
• Form 965-E, Consent Agreement Under Section 965(i)(4)(D).
Definitions
Although these forms were not released in time for reporting
for 2019 tax years, the instructions for these new forms contain Deferred foreign income corporation (DFIC). A DFIC is, with
information that may be useful to filers of Form 965-A. As such, respect to any U.S. shareholder, any specified foreign
references to these new instructions have been added corporation (as defined under section 965(e)) of a U.S.
throughout the instructions for Form 965-A. shareholder that has accumulated post-1986 deferred foreign
income (as defined under section 965(d)(2)) as of November 2,
Background 2017, or December 31, 2017, that is greater than zero.
On December 22, 2017, section 965 of the Code was amended. U.S. shareholder. For tax years of foreign corporations
As a result of the amendment, certain taxpayers are required to beginning before January 1, 2018, a U.S. shareholder is a U.S.
include in income an amount (a section 965(a) inclusion amount) person who owns (directly, indirectly, or constructively) 10% or
based on the accumulated post-1986 deferred foreign income of more of the total combined voting power of all classes of stock of
certain foreign corporations (specified foreign corporations) that a foreign corporation. A U.S. person for this purpose is defined
are deferred foreign income corporations (DFICs) that they own in section 957(c) of the Code.
either directly or indirectly through other entities. Other taxpayers
may have inclusions in income under section 951(a) by reason Net income tax liability. The taxpayer’s regular income tax
of section 965 due to ownership of DFICs through domestic liability reduced by the credits allowed under subparts A, B, and
pass-through entities that are U.S. shareholders of the DFICs. D of part IV of subchapter A (generally non-refundable credits).
When referring to both amounts in the preceding two sentences, Net 965 tax liability. The excess of the taxpayer’s net income
these instructions use the term “section 965(a) inclusion.” tax liability computed with all section 965 amounts included
Section 965 also allows for a deduction (section 965(c) (“with calculation”) over the taxpayer’s net income tax liability
deduction). Section 965(a) inclusions and corresponding section without regard to section 965 (“without calculation”). See
965(c) deductions are taken into account based on the last tax Regulations section 1.965-7(g)(10) for rules for computing the
year of the DFIC that begins before January 1, 2018. net 965 tax liability.
Certain taxpayers may make certain elections with respect to S corporation-related net 965 tax liability. With respect to an
section 965. Relevant to this form, these elections include: (i) an S corporation, the excess of the taxpayer’s net income tax
election to pay a net 965 tax liability over 8 years, and (ii) an liability computed with all section 965 amounts included (which,
election by S corporation shareholders to defer payment of a net in this case, includes only section 965 amounts allocated from
965 tax liability with respect to an S corporation until a triggering such S corporation with respect to DFICs of which such S
event. In the case of the deferral election by S corporation corporation is a U.S. shareholder) (“with calculation”) over the
shareholders, the deferred amounts are subject to annual taxpayer’s net income tax liability without regard to section 965
reporting requirements, and when a triggering event occurs, the (“without calculation”).
S corporation shareholder may then (subject to certain
limitations) elect to pay the amount of the net 965 tax liability that Reporting year. The tax year of the return with which this form
is no longer subject to deferral over 8 years. is being filed.

Who Must File
General Instructions Any individual taxpayer (or taxpayer taxed like an individual) who
has a net 965 tax liability for any tax year or has any net 965 tax
Purpose of Form liability remaining unpaid at any time during a tax year must file
This form should be used by individual taxpayers and entities this form.
taxed like individuals (for example, certain trusts and estates).
This form is used to report a taxpayer’s net 965 tax liability for
each tax year in which a taxpayer must report or pay section 965
amounts. In addition, this form is used to report the

Jan 25, 2020 Cat. No. 71280E

- 2 -

Page 2 of 5 Fileid: … ns/I965A/202001/A/XML/Cycle04/source 13:06 - 25-Jan-2020

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

a line in Part I the tax year of the net 965 tax liability for which the
When and Where To File installment payment liability is being assumed in column (a); the
File Form 965-A with the income tax return of the taxpayer for $60 amount of the transfer as a positive number in column (j);
the reporting year by the due date (taking into account and the tax identification number of Transferor in column (k). In
extensions, if any) of the return. addition, on the corresponding line in Part II, Taxpayer would
report the $15 installment payment made in column (g), Paid for
Electronic Filing of Form 965-A Year 6 (the installment year as if Taxpayer were paying as
If you file your income tax return electronically, Form 965-A is Transferor). In the next reporting year, Taxpayer would report all
filed with the electronic income tax return. See the instructions the same information in Part II, plus the payment of $20 (20% of
for your income tax return for general information about the original $100 liability) in column (h), Paid for Year 7. In the
electronic filing. following reporting year, Taxpayer would report all the same
information as in year 7, plus the final payment of $25 (25% of
the original $100 liability) in column (i), Paid for Year 8.
Specific Instructions • Triggered deferred S corporation-related net 965 tax
liability. Deferred S corporation-related net 965 tax liabilities
Amended Report become subject to payment when a triggering event occurs.
Check the amended report box at the top of page 1 of the form if (See instructions for Part III and Part IV for information
Form 965-A is filed with an amended return that is filed to concerning the computation, reporting, deferral election, and
change any reporting related to section 965, regardless of triggering events for S corporation-related net 965 tax liabilities.)
whether a Form 965-A has previously been filed. When such a deferred liability is triggered, it must be transferred
from Part IV, where it is annually reported, to Part I, column (f).
Part I – Report of Net 965 Tax Liability Such a triggered S corporation-related net 965 tax liability is
generally eligible for an election to be paid in 8 installments
and Election to Pay in Installments beginning in the year of the triggering event. In the case of a
Lines 1 through 8. Report in Part I net 965 tax liability amounts triggering event with respect to a deferred S corporation-related
as follows. net 965 tax liability, complete one of lines 4 through 8 as follows:
In column (a), report the tax year in which the triggering event
On lines 1 and 2, you must continue to report 2017 and/or occurred. Skip columns (b) through (e) and report the triggered
2018 amounts for all columns, including the original computation liability in column (f). Report in column (g) whether the taxpayer
of net 965 tax liability reported in columns (b) through (i) on a elected to pay the triggered liability in 8 installments by entering
prior-year Form 965-A. Report in column (j) any current-year net “Yes” or “No.”
965 tax liability transferred out (that is, for which you filed a valid
transfer agreement as the transferor) or any current tax year For certain triggered net 965 tax liabilities, the taxpayer
subsequent adjustments. Also complete column (k), if ! may elect to pay in installments only with consent of the
applicable. CAUTION Secretary. (See instructions for Form 965-E for more
For 2019 tax years, use line 3 to report section 965(a) details.) Without consent, the taxpayer must enter a checkmark
inclusions derived solely through interests in pass-through in the “No” column of column (g) and enter the amount of the
entities that are U.S. shareholders of DFICs. triggered liability in column (h).
Use lines 4 through 8 to report other amounts of net 965 tax • If the taxpayer does not (or cannot) elect to pay the triggered
liability of the taxpayer, such as: deferred net 965 tax liability in installments, then report the
• Installment liability transfers in. The taxpayer may, in amount from column (f) in column (h). This should equal the
certain circumstances, and by agreement with the Secretary, payment reported in the corresponding line of Part II, column (b),
assume as transferee the installment payment liability for the Paid for Year 1.
transferor's remaining net 965 tax liability and pay it in the same • If the taxpayer elects to pay the triggered liability in
manner as if the taxpayer were the transferor. (See instructions installments, skip column (h) and report the amount from column
for Form 965-C for more details.) If this occurs, the transferee (f) in column (i). The corresponding line in Part II, column (b),
should complete one of lines 4 through 8 in Part I as follows: Paid for Year 1, should report an 8% payment of the amount
• In column (a), enter the tax year of the net 965 tax liability for elected to be paid in installments. The remaining payments
which the installment payment liability is being assumed. For should generally be reported in subsequent reporting years
example, if a net 965 tax liability incurred in tax year 2017 (with according to the installment schedule. (See instructions for Part
respect to which an installment payment election was made) II, line 1, for the general installment schedule.)
was transferred to a transferee in 2022, in 2022 the taxpayer • If lines 4 through 8 do not provide adequate lines to report all
(transferee) reports “2017” in column (a). the taxpayer’s transactions described above, an additional Form
• Skip columns (b) through (i). 965-A should be used.
• In column (j), report, as a positive number, the remaining
installment payment liability (that is, original liability less Note. Even if a net 965 tax liability was reported on a taxpayer’s
payments made by the transferor) assumed by the taxpayer as income tax return and fully paid, because no elections were
transferee. made, the taxpayer must complete the appropriate line in Part I
• In column (k), report the tax identification number of the and report the related payment on the corresponding line in Part
transferor. II, column (b).
• Payments of such liability would then be reported on the Note. If an installment election under section 965(h) or a
corresponding line of Part II in the same manner as if the deferral election under section 965(i) was made, then the
taxpayer were the transferor. taxpayer must complete the appropriate line in Part I, as well as
For example, assume Transferor had an original net 965 tax the corresponding line in Parts II through IV, as applicable, to
liability of $100 in year 1, when an installment payment election report the status of the net 965 tax liability and any related
was made. In years 1 through 5, Transferor reports payments of adjustments for the reporting year.
five 8% installments. Then, in year 6, the liability to pay the
remaining installments (15%, 20%, and 25%) totaling $60 is
transferred to Taxpayer as transferee. Taxpayer would report on

-2- Instructions for Form 965-A (Rev. 01-2020)

- 3 -

Page 3 of 5 Fileid: … ns/I965A/202001/A/XML/Cycle04/source 13:06 - 25-Jan-2020

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Column (b). Report the taxpayer’s net income tax liability for intentional disregard, or fraud on the part of TP. This adjustment
the tax year reported in column (a), with all section 965 amounts would be prorated to all the installments. TP would report the
included (“with calculation”). $50 adjustment in Part I, line 1, column (j), as a positive number,
so the reported adjusted liability would be $150. In addition, TP
Column (c). Report the taxpayer’s net income tax liability for would pay and report (in addition to the original $8 installment
the tax year reported in column (a), without regard to section 965 reported for year 5) $20 on Part II, line 1, column (f),
(“without calculation”). representing 8% of the adjustment prorated to each of years 1
Column (d). Report the excess of the taxpayer’s “with through 5, for which the installment due date had already
calculation” reported in column (b) over the “without calculation” arrived. For year 6, TP would pay and report $22.50 (15% of the
reported in column (c). This is the taxpayer’s net 965 tax liability adjusted $150 liability); for year 7, $30 (20% of the adjusted
for the tax year reported in column (a). $150 liability); and for year 8, $37.50 (25% of the adjusted $150
liability).
Column (e). If the taxpayer is a shareholder in one or more S
corporation(s) with section 965 amounts, report the total of In a case in which a net 965 tax liability for a tax year is both
column (g) from Part III for the tax year reported in column (a). adjusted and transferred, report the net adjustment/transfer
This is the total S corporation-related net 965 tax liability the number in column (j), a transferee tax identification number in
taxpayer elected to defer. See detailed instructions for Part III column (k), and provide a statement, attached to this form, which
regarding the S corporation-by-S corporation calculations and includes details of the amounts netted in column (j).
elections.
Part II – Record of Amount of Net 965
Column (f). Report the amount in column (d), less the amount
in column (e), if any. This is the taxpayer’s net 965 tax liability Tax Liability Paid by the Taxpayer
eligible for the installment payment election. Part II is intended to be a cumulative record of the actual
payments the taxpayer has made with respect to the net 965 tax
Column (g). If the taxpayer made an election to pay a net 965 liabilities reported in Part I.
tax liability in installments over 8 years as provided for in section
965(h) and in the manner described in Regulations section Line 1. This line records the actual payments with respect to the
1.965-7(b)(2), enter a check mark in the “Yes” column. If “Yes,” net 965 tax liability reported on line 1 of Part I for the tax year
skip column (h) and enter the amount from column (f) in column 2017.
(i). Otherwise, enter a check mark in the “No” column. If “No,” The general installment payment schedule for a net 965 tax
enter the amount from column (f) in column (h) and skip column liability subject to an election to pay in installments is:
(i). 1. 8% of the net 965 tax liability payable in year 1 (the year
The actual payment of the first installment is due no later of the section 965(a) inclusion or triggering event with respect to
! than the due date of the return for the tax year without a deferred S corporation-related net 965 tax liability),
CAUTION extension, even if the election is made on a return filed 2. 8% of the net 965 tax liability payable in year 2,
by the extended due date.
3. 8% of the net 965 tax liability payable in year 3,
Column (j). Report the following in column (j): 4. 8% of the net 965 tax liability payable in year 4,
• Report, as a negative number, any net 965 tax liability for the 5. 8% of the net 965 tax liability payable in year 5,
year reported in column (a) that has been transferred out to a
6. 15% of the net 965 tax liability payable in year 6,
transferee, by agreement with the Secretary, under which the
transferee becomes liable for the remaining installments due on 7. 20% of the net 965 tax liability payable in year 7, and
the liability in the same manner as if such transferee were the 8. 25% of the net 965 tax liability payable in year 8.
taxpayer. (See instructions for Form 965-C for more details.) In If, for any reason, the actual payment differs from the
addition, provide the tax identification number of the transferee schedule, report the actual payment made.
in column (k). For example, if the taxpayer (transferor) incurred a
net 965 tax liability in tax year 2017, for which an installment Example. If the reporting year is 2019 and the taxpayer is
payment election was made, then properly transferred the reporting a 2017 net 965 tax liability for which an installment
liability net of payments previously made, to a transferee in payment election was made, because the 2019 reporting year is
2022, the taxpayer (transferor) would report, on line 1, column “Year 3” with respect to a 2017 net 965 tax liability being paid in
(j), as a negative number, the amount of the net liability installments, installment payments reported in Part II on line 1,
transferred out. The making and reporting of payments on such the line for 2017, should generally be:
liability should generally cease (see instructions for Part II, later). • In column (b), Paid for Year 1, report 8% of the 2017 net 965
• Report any transfer in of a net 965 tax installment payment tax liability;
liability from a seller/transferor by a transferee (see the • In column (c), Paid for Year 2, report 8% of the 2017 net 965
instructions for lines 1 through 8, earlier). tax liability; and
• Report subsequent adjustments to the net 965 tax liability for • In column (d), Paid for Year 3, report 8% of the 2017 net 965
the tax year reported in column (a) for which no amended return tax liability.
was required to be filed, such as an audit adjustment. A liability
increase should be reported as a positive number and a Column (a). Report the tax year of the section 965(a) inclusion,
decrease as a negative number. the net 965 tax liability for which an installment payment liability
is being assumed, or triggering event with respect to a deferred
Note. An adjustment of a net 965 tax liability elected to be paid S corporation-related net 965 tax liability, as reported on the
in installments is generally prorated to all installments. corresponding line of Part I, column (a).
For example, for tax year 2017, a taxpayer (TP) reported a Columns (b) through (i). These columns are used to record
$100 net 965 tax liability for which an installment election was the taxpayer’s cumulative payments, made each reporting year,
made. For each of years 1 through 5, TP pays and reports an $8 for the net 965 tax liability reported on the corresponding line in
installment. Also, in year 5, an audit adjustment increases the Part I.
2017 net 965 tax liability to $150, a $50 positive adjustment. No If no installment election is made, the net 965 tax liability
amended return was required and there was no negligence, reported in Part I, column (h), should be paid and reported on

Instructions for Form 965-A (Rev. 01-2020) -3-

- 4 -

Page 4 of 5 Fileid: … ns/I965A/202001/A/XML/Cycle04/source 13:06 - 25-Jan-2020

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

the corresponding line of Part II, column (b), Paid for Year 1, and with respect to S corporations. For each S corporation-related
the remaining payment columns (c) through (i) left blank. net 965 tax liability, the taxpayer may elect to defer payment of
If an installment election is made, and no transfers, such liability until a triggering event occurs. (See instructions for
acceleration events, or adjustments occur during the 8-year Part IV for more information on triggering events.) Each S
installment period, then 8% of the net 965 tax liability should be corporation-related net 965 tax liability is calculated on an
paid and reported in column (b), Paid for Year 1 (the year of the individual S corporation basis, and an election to defer such
installment payment election). In the next reporting year, the liability is also made on an individual S corporation basis. Such
relevant information from the prior reporting year should be liabilities deferred, if any, must be totaled by tax year, and the
carried forward, plus 8% of the net 965 tax liability should be total carried to Part I, column (e), of the respective tax year line.
paid and reported in column (c), Paid for Year 2. In future Lines 1 through 3. Report S corporation-related net 965 tax
reporting years, the payments and payment reporting should liabilities for the tax year indicated. On lines 1 and 2, you must
continue similarly in accordance with the general installment continue to report 2017 and/or 2018 amounts for all columns,
payment schedule described above. even though they were reported on a prior-year Form 965-A.
If the taxpayer transfers out a net 965 tax liability, then the Space is provided for reporting net 965 tax liabilities related to
making and reporting of installment payments should generally up to five S corporations. If additional lines are needed for the
cease for the transferred net 965 tax liability in the year of tax year, use additional Forms 965-A.
transfer; however, reporting with respect to the net 965 tax Column (a). Report the name of the S corporation from which
liability is still required for the reporting year if any net 965 tax the taxpayer is allocated section 965 amounts. Abbreviate as
liability of the taxpayer remains unpaid at any time during the needed.
reporting year.
If an acceleration event occurs, then the unpaid portion of all Column (b). Report the tax identification number of the S
remaining installments is due on the date of the acceleration corporation reported in column (a). The tax identification number
event and should be paid and reported in the column for the year of an S corporation is its employer identification number (EIN).
in which the acceleration event occurs; however, reporting with Column (c). Report the taxpayer’s net income tax for the tax
respect to the net 965 tax liability is still required for the reporting year calculated only with section 965 amounts allocated from
year if any net 965 tax liability of the taxpayer remains unpaid at this S corporation with respect to DFICs of which the S
any time during the reporting year. corporation is a U.S. shareholder. This is the S
If an adjustment occurs to a net 965 tax liability for which an corporation-related “with calculation.”
installment election has been made, including on an amended Column (d). Report the taxpayer’s net income tax for the tax
return, the adjustment should generally be prorated over all the year calculated without regard to section 965, that is, the
installment payments. For the part of the adjustment prorated to “without calculation.” This should equal the taxpayer’s net tax
installments whose payment date has already arrived, adjust the liability without section 965 amounts for the corresponding tax
payment for the reporting year in which the adjustment is made year reported in Part I, column (c).
and report accordingly. For the part of the adjustment prorated to
installments for which the payment date has not yet arrived, pay Column (e). Report the excess of the taxpayer’s S
and report in accordance with the installment schedule. corporation-related “with calculation” reported in column (c) over
the “without calculation” reported in column (d). This is the
Payments should include both actual installment payments taxpayer’s S corporation-related net 965 tax liability with respect
made and excess payments of other income tax liabilities to this S corporation for the tax year.
applied to the taxpayer’s net 965 tax liability.
Column (f). If the taxpayer made an election to defer payment
Column (j). Report the net 965 tax liability remaining unpaid of this S corporation-related net 965 tax liability as provided for in
after the payment for the reporting year. This amount should section 965(i) and in the manner described in Regulations
equal the amount reported on the corresponding line in Part I, section 1.965-7(c)(2), enter a check mark in the “Yes” column.
column (f), or column (i), as applicable, plus or minus any Otherwise, enter a check mark in the "No" column.
amount reported on the corresponding line in Part I, column (j),
less any payments reported in Part II, columns (b) through (i). Column (g). If the taxpayer elected to defer an S
corporation-related net 965 tax liability, enter the amount from
Column (k). For each line, report only the payment made (if column (e). (If the election was not made, then the liability
any) for the reporting year. remains a part of the taxpayer’s total net 965 tax liability subject
Current-year reporting of column (k) amounts: to an installment payment election.) The total of column (g) for a
Individuals: For tax year 2019, enter the amount from Form tax year represents the taxpayer’s total deferred S
965-A, Part II, column (k), line 3, on Schedule 2 (Form 1040 or corporation-related net 965 tax liability for the tax year and
1040-SR), line 9. should be entered on the corresponding tax year line in Part I,
All others: For all other filers (that is, other taxpayers taxed like column (e).
an individual), follow the form instructions for that other
applicable return. Part IV – Annual Report of Deferred
Part III – S Corporation Shareholder: Net 965 Tax Liability Related to 965
Report of Calculation of Net 965 Tax Amounts Allocated from S
Liability Related to 965 Amounts Corporations
Any shareholder of an S corporation that makes an election to
Allocated from an S Corporation and defer payment of an S corporation-related net 965 tax liability
Election To Defer Such Net 965 Tax must report such liability with their income tax return for the year
of election and every year thereafter through the year in which
Liability such amount is fully paid. Part IV provides for the required
This Part allows a taxpayer that is an S corporation shareholder annual reporting of deferred S corporation-related net 965 tax
to report net 965 tax liabilities related to section 965 amounts liabilities and any adjustments related to such deferred liabilities
during the reporting year.

-4- Instructions for Form 965-A (Rev. 01-2020)

- 5 -

Page 5 of 5 Fileid: … ns/I965A/202001/A/XML/Cycle04/source 13:06 - 25-Jan-2020

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

If the taxpayer fails to report for any year information liability, the transfer is not treated as a triggering event if the
! required to be reported under section 965(i)(7) by the transferee, by agreement with the Secretary, becomes liable for
CAUTION due date of the return for such year, 5% of the deferred the deferred S corporation-related net 965 tax liability in the
net 965 tax liability shall be assessed as an addition to tax for same manner as the transferor. (See instructions for Form 965-D
such reporting year. for more details.)
Report the amount of the transfer out as a negative number in
Column (a). Report the year of: column (g) of the same line as the taxpayer reported the
• Deferral election. In a year for which an election is made to deferred S corporation-related net 965 tax liability at the
defer an S corporation-related net 965 tax liability, any amounts beginning of the reporting year.
elected to be deferred must be transferred from Part III, column
(g), to the corresponding line in Part IV, column (d). Enter the In a case of multiple transferees, report the total deferred S
year for which the election is made in column (a) of the corporation-related net 965 tax liability transferred as a negative
corresponding line. number in column (g) and in column (h) report the tax
• Transfer in. In certain circumstances, by agreement with the identification number of a transferee and attach a schedule to
Secretary, a taxpayer may assume a deferred S Form 965-A providing a breakdown of the total deferred S
corporation-related net 965 tax liability from another taxpayer corporation-related net 965 tax liability transferred and the
who had elected to defer such amount. The transferee is liable associated tax identification numbers of each transferee.
for the deferred S corporation-related net 965 tax liability in the Transfers in. A taxpayer may assume, by agreement with the
same manner as the transferor, including being subject to Secretary, a deferred 965 net tax liability as a buyer/transferee of
annual reporting requirements. (See instructions for Form 965-D S corporation stock with respect to which the transferor has a
for more details.) Enter the tax year of transfer in column (a). See deferred S corporation-related net 965 tax liability. The taxpayer
the instructions for Part IV, column (g), later, for reporting the will then be liable for the deferred S corporation-related net 965
amount of the transfer in. tax liability in the same manner as the transferee, including being
Column (b). Report the name of the S corporation to which the subject to annual reporting requirements, beginning for the tax
deferred net 965 tax liability relates. Abbreviate as needed. year of transfer. (See instructions for Form 965-D for more
details.) For the year of transfer, a new line in Part IV must be
Column (c). Report the tax identification number of the S completed, skipping columns (d), (e), and (f), and entering in
corporation reported in column (b). The tax identification number both columns (g) and (i) the deferred S corporation-related net
of an S corporation is its employer identification number (EIN). 965 tax liability transferred in as a positive number.
Column (d). Report the beginning deferred S For reporting years following the year of transfer, report the
corporation-related net 965 tax liability. transferred deferred S corporation-related net 965 tax liability in
• For the year of the deferral election, this amount will be the S the same fashion as all other deferred S corporation-related net
corporation-related net 965 tax liability for which the taxpayer 965 tax liabilities.
elects to defer payment and should be transferred from the Column (h). Provide the tax identification number of the
corresponding line for such S corporation in Part III, column (g). transferee or transferor.
• For subsequent reporting years, the amount reported should
equal the amount on the corresponding line in column (i) from Column (i). For each line, combine the amounts reported in
Part IV of Form 965-A for the prior reporting year. columns (d) through (g).
• For assumptions of deferred S corporation-related net 965 tax
liabilities, by agreement with the Secretary, the amount reported
should equal the amount of S corporation-related net 965 tax Paperwork Reduction Act Notice
liability assumed by the taxpayer. We ask for the information on this form to carry out the Internal
Revenue laws of the United States. You are required to give us
Column (e). Reserved for future use. the information. We need it to ensure that you are complying
Column (f). Report the amount of each deferred S with these laws and to allow us to figure and collect the right
corporation-related net 965 tax liability, payment of which amount of tax.
ceases to be deferred as a result of a triggering event during the
reporting year (“triggered S corporation-related net 965 tax You are not required to provide the information requested on
liability”). The triggered S corporation-related net 965 tax liability a form that is subject to the Paperwork Reduction Act unless the
amount should be reported in column (f) as a negative number form displays a valid OMB control number. Books or records
and transferred to column (f) on one of lines 4 through 8 in Part I relating to a form or its instructions must be retained as long as
as a positive number. See Triggered deferred S their contents may become material in the administration of any
corporation-related net 965 tax liability, in the instructions for Internal Revenue law. Generally, tax returns and return
Part I, lines 1 through 8, earlier. information are confidential, as required by section 6103.
Column (g). Report the amount of deferred S The time needed to complete and file this form will vary
corporation-related net 965 tax liability transferred out or in. depending on individual circumstances. The estimated burden
Transfers (out). When a taxpayer transfers stock of an S for individual taxpayers filing this form is approved under OMB
corporation with respect to which the taxpayer has made an control number 1545-0074 and is included in the estimates
election to defer payment of its S corporation-related net 965 tax shown in the instructions for their individual income tax return.

Instructions for Form 965-A (Rev. 01-2020) -5-

PDF file checksum: 2504398704

(Plugin #1/8.13/12.0)