IRS Form 972 – Are you a shareholder consenting to treat a consent dividend as taxable income without receiving cash? IRS Form 972 is the official document that makes this possible. This guide explains everything you need to know about Form 972, including its purpose, who must file it, step-by-step instructions, filing deadlines, and tax implications — all based on the latest official IRS information.
What Is IRS Form 972?
IRS Form 972, officially titled Consent of Shareholder to Include Specific Amount in Gross Income, is filed under Internal Revenue Code Section 565.
A shareholder uses it to agree to include a specific amount in their gross income as a taxable dividend (called a consent dividend), even though they receive no actual cash distribution from the corporation.
The form is sent directly to the corporation — not to the IRS. The corporation then uses the consents to claim a dividends-paid deduction on its own tax return.
Current Revision: Form 972 (Rev. December 2016) — still the active version as of 2026.
Download the official PDF: https://www.irs.gov/pub/irs-pdf/f972.pdf
OMB Number: 1545-0043
Purpose of Form 972: Why Corporations and Shareholders Use Consent Dividends
Corporations sometimes need to make distributions to qualify for certain tax benefits, such as:
- Avoiding the personal holding company (PHC) tax
- Reducing or eliminating accumulated earnings tax
- Meeting real estate investment trust (REIT) or regulated investment company (RIC) distribution requirements
When actual cash isn’t distributed (to preserve liquidity), a consent dividend allows the corporation to claim the deduction while the shareholder reports the income and increases their stock basis.
Key benefit for the shareholder: You increase your basis in the corporation’s stock by the amount of the consent dividend (treated as if you received and reinvested the dividend).
Important IRS rule: The consent dividend must be an amount that would have been included in the shareholder’s gross income if it had actually been paid.
Who Must File IRS Form 972?
Any shareholder who agrees to treat a consent dividend as taxable income must complete and sign Form 972. This includes:
- Individual shareholders
- Corporate shareholders
- Partnerships
- Estates and trusts
- Foreign shareholders (in certain cases)
The shareholder must send the completed form to the corporation claiming the deduction.
When and Where to File Form 972?
Deadline: Send Form 972 to the corporation by the due date (including extensions) of the corporation’s income tax return for the year it claims the consent dividend deduction.
The corporation must attach:
- Form 973 (Corporation Claim for Deduction for Consent Dividends)
- A copy of every Form 972 received
Shareholder reporting: You must include the consent dividend amount in your gross income on your tax return for the tax year that includes the last day of the corporation’s tax year for which the deduction is claimed.
Example (from IRS instructions):
Corporation has a fiscal year ending June 30, 2027. A calendar-year shareholder consents in November 2026. The corporation claims the deduction on its return for the year ending June 30, 2027. The shareholder reports the income on their 2027 calendar-year return.
Note: The consent is irrevocable once filed (with limited exceptions under the regulations).
Step-by-Step Instructions for Completing Form 972
Here’s exactly how to fill out the form (based on the official December 2016 revision and instructions):
- Shareholder Information
- Name of shareholder
- Identifying number (SSN for individuals, EIN for others)
- Complete address (street, city, state, ZIP; use P.O. box instructions if applicable)
- Line 1 – Consent Amount
Enter the exact dollar amount you agree to include in gross income.
Specify your tax year (beginning and ending dates).
Identify the corporation (name and full address).Note: If Line 1 differs from Schedule A, line 4 total, attach a signed statement explaining the reason and legal authority. - Schedule A – Statement of Shares Owned
- Line 2: Enter the last day of the corporation’s tax year.
- For each class of stock owned on that date:
- Class of stock
- Number of shares
- Certificate numbers (if applicable)
- Amount of consent distribution allocable to that class
- Line 4: Total consent distribution (must match or be explained against Line 1)
- Signature
Sign under penalties of perjury.- Individuals: Sign personally
- Partnerships: One partner signs
- Estates/trusts: Fiduciary signs
- Corporations: Authorized officer signs
- Agents: Must attach power of attorney if not previously filed
Estimated time to complete (per IRS):
- Recordkeeping: 3 hrs 35 min
- Learning about the form: 6 min
- Preparing the form: 9 min
Tax Implications
For the Shareholder:
- Include the full consent amount as a taxable dividend in gross income.
- Increase stock basis by the same amount.
- The amount is treated as received on the last day of the corporation’s tax year.
For the Corporation:
- Claims the total consented amounts as a dividends-paid deduction (via Form 973).
- Must file all Forms 972 with its return.
Related Form: IRS Form 973
Corporations file Form 973 to claim the deduction and summarize all consents received. It shows stock outstanding, distributions made, and consent details by class of stock.
Download Form 973: Available on IRS.gov (search “Form 973”).
Frequently Asked Questions (FAQs) about Form 972
Q: Can I revoke a consent after filing?
A: Generally no — consents are irrevocable except in rare cases specified in Treas. Reg. §1.565-2.
Q: Do I send Form 972 to the IRS?
A: No — send it only to the corporation. The corporation attaches copies to its return.
Q: What if I’m a foreign shareholder?
A: Special sourcing rules may apply (treated as U.S.-source dividend in many cases). Consult a tax professional.
Q: Is there a newer version of Form 972?
A: As of February 2026, the December 2016 revision remains current. Always check IRS.gov for updates.
Q: Where can I find more information?
A: Official instructions are printed on the back of Form 972 and at www.irs.gov/form972. See also IRC Section 565 and Treas. Reg. §1.565-1.
Final Tips for Compliance
- Double-check that the consent amount aligns with the corporation’s planned deduction.
- Keep a signed copy for your records.
- Coordinate timing with the corporation’s tax team.
- If the consent dividend affects qualified dividend treatment or foreign tax credits, consult a qualified tax advisor.
Need the form right now?
→ Download IRS Form 972 PDF
This article is based exclusively on official IRS sources (Form 972 instructions, About Form 972 page, and related regulations) as of February 2026. Tax rules can change — always verify the latest version on IRS.gov and consult a tax professional for your specific situation.
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