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Official form guide
Form 972: Consent of Shareholder To Include Specific Amount in Gross Income
IRS Form 972 is used for Consent of Shareholder To Include Specific Amount in Gross Income. A shareholder must complete this form to agree to include a specified amount as taxable income on their tax return.
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IRS Form 972 - Consent of Shareholder To Include Specific Amount in Gross Income
IRS Form 972 is used for Consent of Shareholder To Include Specific Amount in Gross Income. A shareholder must complete this form to agree to include a specified amount as taxable income on their tax return.
Risk Radar
Scan points- 1Ensure the shareholder reports the dividend in the *same* tax year the corporation claims the deduction.
- 2Failing to report the consent dividend in the shareholder's own tax return.
- 3Submitting the form before the due date of the corporation’s tax filing.
- 4Not including the correct Identifying number (SSN for individuals, EIN for others).
- 5Omitting required details on Line 1 regarding the dollar amount or tax year.
Plain English
This form allows a shareholder to agree that they will count a specific dividend amount as part of their gross income, even if the company never sends them a check for it. If the shareholder agrees to this treatment, the corporation can then claim a deduction for that money on its own taxes. This action also increases the shareholder's basis in their stock.
Submission Date
- Filing date: 2016-12-13 00:00:00
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when a shareholder agrees to report a consent dividend as taxable income on their own tax return, even if no actual cash distribution occurs.
- Do not use it when the amount included in gross income is different from the total shown on Schedule A, line 4, without attaching an explanatory statement.
- Check Form 973 instead when the corporation claiming the deduction also needs to submit its corresponding claim for consent dividends.
Form selector
Use this form or another form?
Shareholder is a partnership
One partner must sign Form 972
✓ Check if you are signing as an individual or on behalf of a group.
Amount differs from Schedule A, line 4
The statement must explain the reason and authority for the discrepancy.
✓ Verify your supporting documentation matches Line 1.
Corporation claims deduction
The corporation must attach a copy of each completed Form 972 to its income tax return.
✓ Ensure you send this form *to* the corporation claiming the deduction.
Deadline or filing window
The filing trigger is the agreement to treat the dividend as taxable. The deadline is the due date of the corporation’s tax return for that specific tax year. There is no stated extension period on Form 972 itself, but the corporation must attach it to its filed return.
Checklist
What you need before filling it out
Shareholder Name
Full name of the shareholder · Line 1 (Top)
Identifying number
Individual: Social Security Number; Other: Employer Identification Number · Line 1 (Top)
Amount to include in gross income
Specific dollar amount ($) · Line 1 (Top)
Date Range
Month, day, year for beginning and ending dates · Line 1 (Top)
Corporation Name/Address
Full name, street address, city, state, ZIP of the corporation · Line 1 (Middle)
Class of Stock Details
Class description, Number of shares, Certificate numbers, Amount allocated per class · Lines 3-4 (Schedule A)
Before you submit
- 1Verify the Shareholder Name and Identifying number are correctly entered on Line 1.
- 2Confirm the specific dollar amount to be included in gross income is accurately listed on Line 1.
- 3Check that the beginning and ending dates for the tax year are correctly filled out on Line 1.
- 4Ensure the Corporation's Name and full address are completely entered where indicated on Line 1.
- 5Confirm all classes of stock owned (Line 3) have corresponding share counts, certificate numbers, and allocated amounts listed.
- 6Verify that the Total consent distribution on Line 4 matches the sum of the allocations in Line 3.
- 7Sign the form under penalties of perjury as the shareholder (or one partner if a partnership).
How to file this form
- 1Complete all required fields on Form 972, including identifying information and the specific amount details.
- 2If the consent dividend amount differs from Schedule A, Line 4 total, attach an explanatory statement to Form 972.
- 3Sign the form under penalties of perjury; if a partnership, one partner must sign.
- 4Send the completed Form 972 to the corporation that will claim the consent dividend deduction by the due date of the corporation’s tax return.
Known limitations
- 1Form 972 applies when a shareholder agrees to report a consent dividend as taxable income even if no actual cash distribution is received.
- 2A dividend is considered a 'consent dividend' only if it would have been included in the shareholder’s gross income had it actually been paid.
- 3If the amount listed on line 1 of Form 972 differs from the total shown on Schedule A, line 4, an attached statement must explain the reason and authority for the discrepancy.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is Revision December 2016 (Rev. 12-2016). Information about Form 972 is available at www.irs.gov/form972.
What changed or needs a fresh check
- Edition date — confirm the revision reads December 2016 (Rev. 12-2016).
- Fee — Not stated in the official source.
- Mailing address — Send to the corporation claiming the deduction, not the IRS office listed on page 2.
- Signature — Confirm the shareholder's signature is present and dated.
Quick Facts
Downloads
After you file
- 1The shareholder must report the consent dividend as a taxable dividend in the same tax year the corporation claims the deduction.
- 2The corporation must attach Form 973, Corporation Claim for Deduction for Consent Dividends, and a copy of each completed Form 972 to its income tax return.
- 3Shareholders should keep a copy of the completed Form 972.
- 4The shareholder increases their basis in the stock of that corporation by the amount of the consent dividend for which they are taxed.
Sources
- SRCForm 972 is used for Consent of Shareholder To Include Specific Amount in Gross Income (Under Section 565 of the Internal Revenue Code) — Instructions p.1.
- SRCThe shareholder must send Form 972 to the corporation claiming the deduction for consent dividends — Instructions p.1.
- SRCLine 1 allows the shareholder to agree to include a specific dollar amount in gross income for the tax year beginning and ending dates provided — Instructions p.1.
- SRCForm 972 is used by a shareholder who agrees to report a consent dividend as taxable income even if no actual cash distribution of the consented amounts occurs — General Instructions p.2.
- SRCThe completed Form 972 must be sent to the corporation by the due date of the corporation’s tax return for the year it claims the deduction — When and where to file p.2.
- SRCThe corporation must attach Form 973, Corporation Claim for Deduction for Consent Dividends, along with a copy of each completed Form 972 to its income tax return — When and where to file p.2.
Common confusion points
Who needs to file Form 972?
A shareholder who agrees to treat the consent dividend as a taxable dividend must complete and send Form 972.
→ Send it to the corporation that will claim the consent dividend deduction.
When is the deadline for filing Form 972?
The completed Form 972 must be sent to the corporation by the due date of the corporation’s tax return for the relevant tax year.
→ Check the corporation's filing deadline.
What happens if I don't receive a cash distribution?
Form 972 allows reporting a consent dividend as taxable income even without receiving an actual cash distribution.
→ Confirm the agreement is made to include a specific amount in gross income.
Where do you send the completed Form 972?
The shareholder sends it directly to the corporation that will claim the consent dividend deduction.
→ Do not send the tax form to the IRS office listed on Page 2 unless directed otherwise.
What is the purpose of this form?
It allows a shareholder to agree to include a specific amount as taxable income (a consent dividend) without receiving a cash payment for it.
→ Confirm that the agreement matches the corporation's claim.
What if my Form 972 total doesn't match Schedule A, line 4?
The shareholder must attach a statement explaining the reason and authority for the discrepancy.
→ Attach the supporting statement to Form 972.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- A statement must be attached to Form 972 if the amount included in gross income differs from the total shown on Schedule A, line 4.
Questions about IRS Form 972
What is IRS Form 972 used for?
This form allows a shareholder to agree that they will count a specific dividend amount as part of their gross income, even if the company never sends them a check for it. If the shareholder agrees to this treatment, the corporation can then claim a deduction for that money on its own taxes. This action also increases the shareholder's basis in their stock.
Who must file IRS Form 972?
A shareholder who agrees to treat the consent dividend as a taxable dividend must complete and send Form 972 to the corporation.
What information does IRS Form 972 require?
The form collects the shareholder's Name, Identifying number, Address, and the specific dollar amount agreed upon. It also details the Class of stock, Number of shares, Certificate numbers, and the Amount of consent distribution allocable to each class of stock owned.
When is IRS Form 972 due?
The completed Form 972 must be sent to the corporation by the due date of the corporation’s tax return for the tax year that the corporation will claim the consent dividends as a deduction. The shareholder must report the dividend in the same tax year the corporation claims the deduction.
Where do I file IRS Form 972?
The completed Form 972 must be sent to the corporation claiming the deduction, and the corporation must attach it (along with Form 973) to its income tax return. Do not send the form directly to the IRS office listed on page 2 unless instructed otherwise.
How do I complete IRS Form 972?
First, the shareholder fills out all identifying information (Name, Address, etc.) on page 1. Next, they specify the dollar amount and tax year details. Finally, the form requires a signature by the shareholder or their authorized representative to finalize the consent.
What happens if IRS Form 972 is filed incorrectly?
By signing under penalties of perjury, the shareholder declares that the consent is true, correct, and complete; failure to do so could result in issues with compliance.
Who needs to file Form 972?
A shareholder who agrees to treat the consent dividend as a taxable dividend must complete and send Form 972. Send it to the corporation that will claim the consent dividend deduction.
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