Closing a business doesn't end the day you stop serving customers. If your company is structured as a corporation—or as an LLC that chose to be taxed as such—the IRS requires a specific procedure before it can be considered closed: Form 966. It's not widely known because almost no one needs it until the day they do, and that day often comes with tight deadlines. This guide walks you through the IRS requirements step by step.
What is Form 966 and who should file it
Form 966, "Corporate Dissolution or Liquidation," is the formal notice a corporation submits to the IRS when it adopts a resolution or plan to dissolve or liquidate all or part of its stock. It is a requirement under section 6043(a) of the Internal Revenue Code and applies to corporations and certain agricultural cooperatives. It does not apply to sole proprietorships, partnerships, or LLCs that did not elect to be taxed as corporations—those structures are closed through other means, without this specific form.
The deadline: 30 days from the resolution
This is the fact that business owners often overlook: Form 966 must be filed within 30 days of the corporation adopting the resolution or plan for dissolution or liquidation. This isn't 30 days from when you physically close your doors, nor from when you stop billing; the clock starts ticking from the moment the board of directors formally approves the decision.
What to attach
Form 966 must be accompanied by a certified copy of the resolution or plan of dissolution or liquidation. If that resolution has amendments or supplements that have not been previously submitted to the IRS, those are also attached. The form itself is brief—corporation name, EIN, date of incorporation, date of the resolution, type of liquidation—but without the supporting certified document, the filing is incomplete.
Who signs the form
It must be signed and dated by an authorized officer of the corporation: the president, a vice president, the treasurer, the chief accountant, or a trustee when applicable (for example, in a bankruptcy proceeding). It cannot be signed by any employee or by an external accountant unless they hold that formal position within the company.
Where to send it
Form 966 is sent to the same IRS service center where the corporation files its income tax return. It is not filed electronically with the annual return; it is a separate submission, mailed to that center.
If the dissolution plan changes after
It's common for something to change between the initial resolution and the actual closing: the schedule might be adjusted, an unforeseen asset might appear, or the method for liquidating the shares might be modified. If this happens after the first Form 966 has been filed, the IRS requires a second Form 966 within 30 days of the amendment. This new form must reference the date of the first filing and include the certified amendment.
What 966 does not solve on its own
Filing Form 966 is one step, not the entire closing process. Before finalizing a closure, a corporation typically also needs to: file its final tax return, liquidate and distribute any remaining assets according to state law, settle any outstanding debts with suppliers and the IRS, cancel its EIN if it will no longer be used, and formally dissolve the entity with the secretary of state where it was incorporated. Skipping any of these steps can leave outstanding obligations years after the corporation has effectively ceased operations.
FAQ
What happens if I don't submit Form 966 on time?
The IRS can impose a penalty for failing to comply with the notice, although in practice it is usually evaluated on a case-by-case basis. It is best to file as soon as the resolution is issued, even if the settlement process takes months.
Does my LLC need to file Form 966?
Only if your LLC expressly chose to be taxed as a corporation (C-Corp or S-Corp) to the IRS. If it is taxed as a sole proprietorship, partnership, or under its default treatment, this form does not apply, and the closure must be done through another method.
Does Form 966 automatically close my EIN?
No. The EIN is canceled separately, with a letter to the IRS requesting the closure of the account associated with that number, after all final returns have been filed.
Do I need a lawyer to file Form 966?
It is not mandatory, but if the dissolution involves debts, disagreeing partners, or complex assets, it is worthwhile to have an accountant or lawyer review the plan before formally adopting it, as that is when the 30-day period begins.
Before closing, review how you are structured
Many businesses end up filing Form 966 without having considered whether restructuring would be better than dissolving altogether. If you're still deciding on your path—closing, selling, merging, or simply changing your structure—it's advisable to review it with someone familiar with your specific situation before making any formal decisions.
Request your free quote here and together we'll evaluate the best step for your business.
Fuente: IRS — About Form 966, Corporate Dissolution or Liquidation.
Read also: LLC vs Corporation: which one is right for you in 2026 · LLC vs S-Corp in 2026 · How to open an LLC in the United States · Mistakes when starting a business: the 5 that will sink your business in the first year · How to pay my business taxes: 2026 tax calendar.
