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Ask HN: Is filing federal forms necessary for shutting down idle C-Corp?

by 4e530344963049 on 3/16/21, 7:59 PM with 3 comments

I am looking to dissolve a Delaware C-Corporation - and I have been advised to file a final Form 1120 as well as a Form 966 with the IRS. Are these really necessary if the business did nothing the previous year? No sales or income, etc. What are the penalties for not doing so?

If I choose to do file the "zero return" etc, how do I even do it? Print out the form and send it in to the IRS? I cannot find out how to e-file easily, for instance.

I do plan on dissolving the business with the State of Delaware anyway, and would like to button things up to a reasonable level - and would like to avoid spending thousands of dollars and/or spending more than a few hours.

Any resources, tips, advice, or links that can be shared are appreciated!

  • by 1123581321 on 3/16/21, 9:54 PM

    Who filed for you last year? Just have them do it. It should cost a couple hundred or less unless you have an expensive accountant.

    But yes, you basically are mailing in a return with zero for revenue, expenses, etc. It’s a complete return documenting no activity. You’ll also be marking Final on the form so they don’t expect another one next year even though the corp is dissolved.

  • by codegeek on 3/18/21, 4:03 PM

    Do it the right way even if you think there was no Sales/income etc. You don't want to mess with the IRS because they can fine you for stupid things and it can increase paperwork later on.

    Either do it yourself or get a CPA to do it who may charge you a couple hundred bucks max.

  • by csomar on 3/16/21, 11:00 PM

    1- I'm not 100% certain, but I think if you don't file and your C-Corp defaults (because of the IRS/Delaware debts), they'll close it for you and you should have no liability?

    2- If you are US-based, or have interests in the US; the few thousands dollars are worth paying.