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

(December 2019)
Transfer Agreement Under Section 965(h)(3)

Section references are to the Internal Revenue with these instructions, they will be         only be filed by an eligible section 965(h) 
Code unless otherwise noted.                   considered to have properly entered into a    transferor and eligible section 965(h) 
                                               transfer agreement under section 965(h)       transferee.
                                               (3). However, the Commissioner may 
Future Developments                            review the transfer agreement and may         When and Where To File
For the latest information about               ask additional questions or require           Within 30 days of the covered acceleration 
developments related to Form 965-C and         additional information, including, for        event, the original Form 965-C must be 
its instructions, such as legislation          example, information about the eligible       mailed to the IRS’s Memphis Compliance 
enacted after they were published, go to       section 965(h) transferee's ability to pay    Service Collection Operations at the 
IRS.gov/Form965C.                              the outstanding section 965(h) net tax        following address:
                                               liability. If the Commissioner determines 
Background                                     that the transfer agreement contains a            Memphis CSCO
On December 22, 2017, section 965 of the       material misrepresentation or material            5333 Getwell Road MS 81
Code (section 965) was amended. As a           omission, or if the additional information        Memphis, TN 38118
result of the amendment, certain               requested is not provided within a 
taxpayers are required to include in           reasonable time frame (as communicated        In addition, both the eligible section 
income an amount (a section 965(a)             by the Commissioner), then the transfer       965(h) transferor and the eligible section 
inclusion amount) based on the                 agreement may be rejected as of the date      965(h) transferee must attach a duplicate 
accumulated post-1986 deferred foreign         of the original acceleration event.           copy of Form 965-C to their tax returns for 
income of certain foreign corporations         Alternatively, the Commissioner may           the taxable years during which the 
(specified foreign corporations) they own      determine that an acceleration event has      covered acceleration event occurs, filed 
either directly or indirectly through other    occurred as of the date the transfer          by the due date for the returns (with regard 
entities.                                      agreement was found to have a material        to any extension of time to file).
                                               misrepresentation or material omission.
Taxpayers may make an election under                                                                     No extension of time to file Form 
section 965(h) to pay the section 965(h)                                                     !           965-C will be granted, and relief is 
net tax liability (as defined later in these   Definitions                                   CAUTION
                                                                                                         not available under Regulations 
instructions) in installments over a term of   Eligible section 965(h) transferee.     An    section 301.9100-2 or 301.9100-3 to enter 
8 years. However, if an acceleration event     eligible section 965(h) transferee is a       into a transfer agreement late.
(as defined in section 965(h)(3) and           single U.S. person that is not a domestic 
Regulations section 1.965-7(b)(3)) occurs,     pass-through entity and that meets any        A copy of the eligible section 965(h) 
the unpaid portion of all remaining            one of the six requirements listed in         transferor's most recent Form 965-A or 
installments is generally due on the date of   Regulations section 1.965-7(b)(3)(iii)(B)(1)  Form 965-B, as applicable, is required to 
the acceleration event. If a covered           (i) through (vi).                             be included with Form 965-C.
acceleration event (as defined below) 
occurs, such event will not be considered      Eligible section 965(h) transferor.     An 
to accelerate payment of the section           eligible section 965(h) transferor is a U.S.  Note.       If the section 965(h) net tax liability 
965(h) net tax liability if the transferee     person with respect to which a covered        is adjusted or changed on an amended 
enters into an agreement to be liable for      acceleration event occurs. See the            return after the due date for filing the 
the remaining installments due on the          instructions for Part III, line 1, for when a transfer agreement, an amended transfer 
liability in the same manner as if such        covered acceleration event occurs.            agreement is not required and should not 
                                                                                             be filed.
transferee were the original electing          Section 965(h) net tax liability.   In 
taxpayer.                                      general, the section 965(h) net tax liability 
                                               with respect to any U.S. shareholder is the   Specific Instructions
                                               excess (if any) of the U.S. shareholder's 
General Instructions                           net income tax liability computed with all    Part I – Transferor 
                                               section 965 amounts included over the         Information
Purpose of Form                                U.S. shareholder's net income tax liability 
Form 965-C should be used by an eligible       without regard to section 965. For details,   Use Part I to provide the identifying 
section 965(h) transferor and an eligible      see section 965(h)(6). Also see               information of the eligible section 965(h) 
section 965(h) transferee to enter into a      Regulations section 1.965-7(g)(10) for        transferor. Enter the transferor’s complete 
transfer agreement under section 965(h)        rules for computing the net 965 tax           legal name, taxpayer identification 
(3). This form sets forth the information      liability.                                    number, and street address or post office 
and representations that must be provided                                                    box.
to meet the requirements of Regulations        Who Must File
                                                                                             Part II – Transferee 
section 1.965-7(b)(3)(iii)(B)(4) in order to   The eligible section 965(h) transferor and 
enter into a transfer agreement under          the eligible section 965(h) transferee with   Information
section 965(h)(3). If an eligible section      respect to a covered acceleration event       Use Part II to provide the identifying 
965(h) transferor and an eligible section      must file Form 965-C to meet the              information of the eligible section 965(h) 
965(h) transferee properly complete and        requirements of the eligible section 965(h)   transferee. Enter the transferee’s 
file this Form 965-C with respect to a         transferee exception under Regulations        complete legal name, taxpayer 
covered acceleration event in accordance       section 1.965-7(b)(3)(iii). Form 965-C may 

Jan 27, 2020                                              Cat. No. 72023R

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identification number, and street address      Line 5. Enter the date the next installment   Transferor signature. This transfer 
or post office box.                            payment is due by the transferee in the       agreement (Form 965-C) must be signed 
                                               space provided. The transferee must           by a person who is authorized to sign a 
Part III – Acceleration                        make an annual installment payment for        return on behalf of the eligible section 
Event                                          the section 965(h) net tax liability they     965(h) transferor listed in Part I. By signing 
                                               assume by the due date of their income        Part VI, you declare, under penalties of 
Line 1. Indicate the type of acceleration      tax return. See Regulations section           perjury, that you have examined the form, 
event leading to this transfer agreement       1.965-7(b)(3)(iii)(D) for details.            and to the best of your knowledge and 
by checking box a, b, or c.                                                                  belief, Parts I, III, and IV are true, correct, 
Check box a if the acceleration event          Part V – Eligible Section                     and complete. You also certify that you 
leading to this transfer agreement is                                                        have the authority to execute this transfer 
described in Regulations section               965(h) Transferee’s Ability                   agreement.
1.965-7(b)(3)(iii)(A)(1)(i) or (ii). If you    To Pay Remaining Liability                    Transferee signature. This transfer 
check box a, answer the three questions        Line 6. Check the “Yes” box to confirm        agreement (Form 965-C) must also be 
below box a.                                   that the eligible section 965(h) transferee   signed by a person who is authorized to 
Check box b if the acceleration event          is able to make the remaining payments        sign a return on behalf of the eligible 
leading to this transfer agreement is          required under section 965(h) with respect    section 965(h) transferee listed in Part II. 
described in Regulations section               to the section 965(h) net tax liability being By signing Part VI, you declare, under 
1.965-7(b)(3)(iii)(A)(1)(iii).                 assumed. If you check the “No” box, you       penalties of perjury, that you have 
Check box c and box c(1) if the                do not meet the requirements to enter into    examined the form, and to the best of your 
acceleration event leading to this transfer    a valid transfer agreement.                   knowledge and belief, Parts II, III, IV, and 
                                                                                             V are true, correct, and complete. You 
agreement is described in Regulations          Line 7. Check the “Yes” box if the 
                                                                                             also certify that you have the authority to 
section 1.965-7(b)(3)(iii)(A)(1)(iv). Also     leverage ratio of the eligible section 965(h) 
                                                                                             execute this transfer agreement.
answer the question below box c(1).            transferee exceeds three to one. 
Check box c and box c(2) if the                Otherwise, check the “No” box. The 
acceleration event leading to this transfer    leverage ratio means the ratio that the       Paperwork Reduction Act 
agreement is described in Regulations          total indebtedness of the transferee bears 
section 1.965-7(b)(3)(iii)(A)(1)(v). Also      to the sum of its money and all other         Notice
answer the question below box c(2).            assets reduced, but not below zero, by the    We ask for the information on this form to 
Check box c and box c(3) if the                total indebtedness. See Regulations           carry out the Internal Revenue laws of the 
acceleration event leading to this transfer    section 1.965-7(b)(3)(iii)(B)(6) for more     United States. You are required to give us 
agreement is described in Regulations          information.                                  the information. We need it to ensure that 
section 1.965-7(b)(3)(iii)(A)(1)(vi). Also                                                   you are complying with these laws and to 
answer the question below box c(3).            Note. The leverage ratio of the eligible      allow us to figure and collect the right 
                                               section 965(h) transferee is a factor the     amount of tax.
Covered acceleration event.    A person        Commissioner uses to determine whether 
satisfies the requirement to have a            the eligible section 965(h) transferee has    You are not required to provide the 
covered acceleration event if that person      the ability to pay the outstanding section    information requested on a form that is 
is able to check box a, b, or c based on       965(h) net tax liability. A leverage ratio in subject to the Paperwork Reduction Act 
the above instructions.                        excess of three to one does not by itself     unless the form displays a valid OMB 
Line 2. Enter the date of the covered          determine whether or not a transfer           control number. Books or records relating 
acceleration event in the space provided.      agreement is valid.                           to a form or its instructions must be 
                                                                                             retained as long as their contents may 
Line 3. Provide a detailed description of      Line 8. Provide any other pertinent           become material in the administration of 
the covered acceleration event in the          information regarding the eligible section    any Internal Revenue law. Generally, tax 
space provided.                                965(h) transferee's ability to pay the        returns and return information are 
                                               section 965(h) net tax liability being        confidential, as required by section 6103.
                                               assumed. This information may include, 
Part IV – Report of Unpaid                     but is not limited to, the adequacy of the    The time needed to complete and file 
Section 965(h) Net Tax                         transferee's income, the value of the         this form will vary depending on individual 
Liability Being Assumed                        transferee's assets, and the transferee's     circumstances. The estimated burden for 
                                               access to capital.                            individual taxpayers filing this form is 
Line 4. Enter the dollar amount of the                                                       approved under OMB control number 
                                                                                             1545-0123 and is included in the 
transferor's section 965(h) net tax liability  Part VI – Terms of                            estimates shown in the instructions for 
remaining unpaid.
                                               Agreement                                     their business income tax return.
Note. The amount of the transferor's           By signing this transfer agreement, the 
section 965(h) net tax liability is subject to eligible section 965(h) transferor and the 
adjustment by the Commissioner. See            eligible section 965(h) transferee agree to 
Regulations section 1.965-7(b)(3)(iii)(B)(4)   the terms set forth in Part VI of Form 
(iv).                                          965-C.

                                                                   -2-                       Instructions for Form 965-C (12-2019)