Rev. Proc. 67-12

Revenue Procedure 65-10, C.B. 1965-1, 738, provides instructions and guidelines relating to (1) the determination of the taxable status of corporate distributions to stockholders, and (2) the data to be furnished to the Internal Revenue Service with the lower portion of the corporation's Form 1096, U.S. Annual Information Return, in support of the corporate determination of the earnings and profits upon which the taxability of distributions depends.

The lower portion of form 1096 for 1966 is to be filed only by those corporations which deem their ordinary distributions to shareholders not to be wholly taxable as dividends or by those corporations which made liquidating distributions within 1 calendar month under the provisions of section 333 of the Internal Revenue Code of 1954.

² Also released as Technical Information Release 887, dated Feb. 24, 1967.

This lower portion of form 1096 is to be filed with the Director, Income Tax Division, T:I:C:1:E&P, Internal Revenue Service, Washington, D.C. 20224.

In outlining the data needed to enable the Service to test the accuracy of the corporation's determinations, section 6.02 of Revenue Procedure 65-10 provides for the submission of a computation of the estimated earnings and profits of the current year when the determination is made before the corporation's Federal income tax return (form 1120) has been prepared. As a modification of that provision, a corporation which has not filed its related income tax return by the due date for form 1096 should (1) complete and file the lower portion of form 1096, showing the taxable status of distributions as reported to shareholders, and (2) attach a request for an extension of time for filing the computation until the time the related income tax return is filed. Such computation of current-year earnings and profits should be based on the return as filed and the return's schedule L should be used in the detailed reconciliation of ending book-basis balance sheet and surplus with the ending tax-basis balance sheet and earnings and profits.

Revenue Procedure 65-10 is hereby modified to incorporate the procedures prescribed above.