Form 973 Form 973 Corporation Claim for Deduction for Consent Dividends

Form

Corporation Claim for Deduction
for Consent Dividends

973

(Rev. December 2003)
Department of the Treasury
Internal Revenue Service

For tax year beginning

, 20

, and ending

Name of corporation

Class of stock

OMB No. 1545-0044

(Under Section 561 of the Internal Revenue Code)

Number of shares
outstanding on first
day of tax year

Number of shares
outstanding on last
day of tax year

, 20
.
Employer identification number

Description of dividend rights

Actual distributions per
share made in tax year *

* If a distribution was not made on all shares of any class, describe any unequal treatment:

Describe any other changes in outstanding stock during the tax year:

(Use more sheets if necessary.)
For Paperwork Reduction Act Notice, see back of form.

Cat. No. 17059P

Form

973

(Rev. 12-2003)

Page

Form 973 (Rev. 12-2003)

2

If any stock outstanding on the last day of the tax year is entitled to cumulative dividends, show the amount for earlier years
unpaid at the beginning of the tax year. Give the class or classes of stock involved.

(Use more sheets if necessary.)

Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.
Purpose of form. Form 973 is filed by a corporation claiming
a consent dividend deduction under section 565.
Who may file. The consent dividend provisions apply to
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.
Limitations. A consent dividend deduction may only be
taken as to the amount stated on Form(s) 972 (see below),
for “consent stock” (as defined in section 565(f)(1)), which is
not a “preferential dividend” (as defined in section 562(c)),
and which would constitute a “dividend” (as defined in
section 316) if actually paid.
How to file. Attach Form 973 to the corporation’s income
tax return for the tax year the 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 submits an
unsigned Form 972, it must retain the original, signed Form
972 in its records.
Nonresident aliens and foreign shareholders. If the
corporation receives a Form 972 from a nonresident alien or
other foreign shareholder, the corporation must pay any
withholding tax it would have withheld if the dividend had
been actually paid (see Regulations section 1.565-5(a) and
sections 1441 and 1442).

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; and
● Form 1042-T, Annual Summary and Transmittal of Forms
1042-S.
See the instructions for these forms for more detailed
information on filing and transmitting the payment.
Paperwork Reduction Act Notice. 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 the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the right
amount of tax.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their content may become material in the
administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
average time is:
Recordkeeping
3 hr., 31 min.
Learning about the law or the form
30 min.
Preparing and sending the form to the IRS
34 min.
If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. You can write to the
Internal Revenue Service at the address listed in the
instructions of the tax return with which this form is filed.