Form 4876-A – Election To Be Treated as an Interest Charge DISC

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From my side of the desk, Form 4876-A is one of those filings that looks short and turns out to be unforgiving. A client comes to us ready to capture export tax savings, and the whole thing hinges on getting the 90-day window, the two 95% tests, and unanimous shareholder consent right the first time. Miss one, and the election does not exist.

So this guide walks the rules that actually live on Form 4876-A, the election a domestic C corporation files to be treated as an interest charge domestic international sales corporation (IC-DISC) under IRC section 992. We cover who can elect, the timing that flips between the first and later tax years, the consent and signature requirements, and the supplemental form you may owe if shares move before the election takes effect.

Key Takeaways

• Form 4876-A is the election a domestic C corporation files to be treated as an interest charge domestic international sales corporation (IC‑DISC) under IRC section 992. It is only the election form; the annual return is Form 1120‑IC‑DISC.
• Timing flips by year. For a first tax year, file within 90 days after the tax year begins. For any later year, file in the 90‑day window immediately before the first day of that year.
• To qualify, at least 95% of gross receipts must be qualified export receipts, qualified export assets must be at least 95% of all assets at year‑end, and the corporation must have one class of stock with par or stated value of at least $2,500 on each day of the year and keep separate books.
• All shareholders as of the first day of the effective tax year must consent. Each consent is irrevocable and binds transferees, and one non‑consenting shareholder voids the election.
• File with the Service Center where the corporation files Form 1120‑IC‑DISC, and download the current IRS instructions before you file. Guidance and addresses change over time.

What Form 4876-A actually is

Form 4876‑A is the election to be treated as an Interest Charge Domestic International Sales Corporation, often called an IC‑DISC, and it is only the election form, not the annual return the IC‑DISC later files on Form 1120‑IC‑DISC. It is a corporate filing, and it applies to the shareholders while the election is in effect. The election is time‑sensitive, and it ties to export‑related tax incentives under U.S. law. If you are not creating an IC‑DISC, this form is not for you.

Who should file Form 4876‑A

• A corporation that is electing IC‑DISC treatment (S corporations, certain financial institutions, and other corporations listed in section 992(d) are not eligible).
• Shareholders are affected by the election while it remains in place, and because each consent is irrevocable and binds all transferees, selling or transferring shares does not relieve those shares from the election.
• File with the IRS Service Center where the corporation will file its annual return, Form 1120‑IC‑DISC, and always follow the current instructions for the filing location.

Key timelines to know

• The IC‑DISC election has specific timing rules, and the direction differs by year. Per the IRS Instructions for Form 4876-A: for a first tax year, file within 90 days after the tax year begins; for any later tax year, file during the 90‑day period immediately before the first day of that year. Review the latest instructions before filing.

If any of these tests fail or the entity is ineligible, the election will not hold no matter how clean the paperwork is, so confirm them with current IRS guidance before you start collecting consents.

Do you qualify, the IC‑DISC tests

Before the election even matters, the corporation has to clear the organizational and operational tests under IRC sections 992 and 993. Run these before you collect a single consent, because failing one voids the election no matter how clean the paperwork is.

• Domestic C corporation. The corporation must be organized under the laws of a state of the United States or the District of Columbia.
• 95% qualified export receipts. At least 95% of the corporation's gross receipts during the tax year must be qualified export receipts, as defined in IRC section 993. This is measured on gross receipts, not net income.
• 95% qualified export assets. At the end of the tax year, the adjusted basis of qualified export assets must be at least 95% of the sum of the adjusted basis of all assets. This is a separate year‑end test from the receipts test, and both must be met.
• One class of stock and a $2,500 floor. The corporation must have only one class of stock, with a par or stated value of at least $2,500 on each day of the tax year (for a new corporation, on the last day to elect IC‑DISC status and each later day).
• Separate books and records. The corporation must keep its own separate books and records; combined accounting with a parent will not satisfy the requirement.
• Tax‑year conformity. The IC‑DISC's tax year must conform to the tax year of the shareholder, or shareholder group, with the highest percentage of voting power under IRC section 441(h).

Watch the ineligible list. S corporations, certain financial institutions, and other corporations listed in IRC section 992(d) cannot be IC‑DISCs. If the exporter is an S corporation, the usual fix is to hold the IC‑DISC in a separate C corporation rather than electing from the S corporation itself.

Filing windows and where to file

The timing is the part filers get wrong most, because the direction of the 90‑day window flips between the first year and every later year. Map it before you commit to the election.

The 90‑day windows

• First tax year. Complete and file Form 4876-A within 90 days after the beginning of the tax year. The clock runs from the start of the year, not a fixed calendar date.
• Any subsequent tax year. File during the 90‑day period immediately preceding the first day of that tax year. For later years the window runs before the year begins, the opposite of the first‑year rule.
• Once made, the election stays in effect until it is terminated or revoked under Regulations section 1.992-2(e). It is not re‑filed each year. What is filed annually is the IC‑DISC return, Form 1120‑IC‑DISC.

Where to file and address details

• File Form 4876-A with the IRS Service Center where the corporation will file its annual return, Form 1120‑IC‑DISC. Confirm the current Service Center against the latest 1120‑IC‑DISC instructions.
• Do not mail it to the comments address. The IR‑6526 address in Washington, DC (1111 Constitution Ave. NW) printed in the instructions is for comments about the form only, not for filing.
• On the form, include the suite, room, or other unit number after the street address. Use a P.O. box only if the post office does not deliver mail to the street address.

If shares are issued or change hands between the date the election is filed and the date it takes effect, the corporation must file a Supplemental Form 4876-A with SUPPLEMENTAL written across the top, within the first 90 days of the tax year the election takes effect.

Shareholder consent rules

Consent is the part that quietly sinks elections. The election is valid only if all of the corporation's shareholders, as of the first day of the tax year the election takes effect, consent to it. Majority consent is not enough, and a single non‑consenting shareholder voids the whole election. Each consent is irrevocable and binds all transferees of those shares.

How shareholders consent

• Part II or a separate statement. Each shareholder signs the consent statement in Part II of Form 4876-A, or files a separate consent statement using the wording the instructions prescribe. Several shareholders may combine their consents in one statement.
• Jointly owned stock. If legally married spouses jointly own the stock or its income, both spouses must sign. If tenants in common, joint tenants, or tenants by the entirety own the stock, each person must sign.
• Minors, estates, and trusts. The legal guardian signs for a minor (the natural guardian if none is appointed). The executor or administrator signs for an estate, and the trustee for a trust; any one authorized fiduciary may sign.
• Entity and foreign shareholders. For a corporation or partnership shareholder, an officer or partner authorized to sign its other returns may consent. A foreign person's consent may be signed by anyone who could sign if that person were a U.S. person.
• Transferees and extensions. If shares transfer before a consent is filed, the transferee may consent as long as the transfer and consent both happen within the first 90 days of the tax year. Late consents need reasonable cause and a Service Center extension; a transfer after day 90 gets an extension only if the transferor was eligible for one.

Completing Part I and Part II, line by line

The form runs two pages. Part I captures the corporation and its shareholders; Part II holds the consents. Get the identity fields and share counts right, because mismatches there are what slow processing.

Part I, corporation and shareholder data

• Item A is the employer identification number. Item B is the principal business classification, using the Codes for Principal Business Activity in the Instructions for Form 1120‑IC‑DISC, not generic codes from another form.
• Item C is the tax year ending month and day, which must conform to the highest‑voting‑power shareholder. Item D is the optional contact name and phone. Item E is the tax year the election takes effect, and Item F is the date the corporation began doing business.
• Item G lists the name and address (including ZIP) of each shareholder, with 10 rows printed and attachments for more. Columns Ha and Hb show shares held on the first day of the year of election and on the date of consent; both must be completed for every shareholder.
• Column I is the identifying number: the SSN for an individual and the EIN for all other shareholders, including trusts and estates.

Part II and signatures

• Part II holds the shareholders' consent signatures, also 10 rows. Each consent is irrevocable and binds transferees.
• Form 4876-A must be signed by the president, vice president, treasurer, assistant treasurer, chief accounting officer, or another officer (such as a tax officer) authorized to sign for the corporation. Not just any employee.

Accountably note, corporations that keep a live consent log mapped to each Part II line and to the Ha and Hb share counts close these elections without last‑minute scrambles. Build that log the moment you decide to elect, not at filing.

Supplemental Form 4876-A when shares change

If, between the date the election is filed and the date it takes effect, the corporation issues more shares or share ownership changes, the corporation must file a Supplemental Form 4876-A. This is mandatory, not optional.

How the supplemental form works

• Write SUPPLEMENTAL across the top of the form, and file it within the first 90 days of the tax year the election takes effect.
• Include all the information from the earlier form except the list of owners in Parts I and II. Report only the owners of the new or additional shares in Part I, and obtain only their consents in Part II.
• Each new shareholder or holder of additional shares must consent for the supplemental form to be valid, just as for the original election.

Keep proof of timely filing for both the original and any supplemental form. Books and records relating to Form 4876-A must be retained as long as their contents may be material to administering any Internal Revenue law, and returns and return information are generally confidential under IRC section 6103.

What happens after you file

Once the election is filed on time with valid consents, the corporation is treated as an IC‑DISC for the effective tax year and each year after, until the election is terminated or revoked under Regulations section 1.992-2(e). It does not expire annually and is not re‑filed each year. The election applies to every shareholder who owns stock while it is in effect, including transferees.

From that point, the IC‑DISC files its annual return on Form 1120‑IC‑DISC with the same Service Center. If a corporation has to change its tax year to meet the IRC section 441(h) conformity rule, the initial alignment generally does not require IRS consent; a later change by the corporation, or a tax‑year change by a shareholder, may require IRS consent under section 442. Always check the IRS future‑developments page (posted at www.irs.gov/form1120icdisc) before relying on the September 2016 revision for a new year.

Common mistakes we see, and how to avoid them

Most Form 4876-A errors trace back to the strict consent and timing rules that make the IC-DISC election valid, plus a few eligibility traps. These are the ones my team flags most.

Quick comparison, the IC‑DISC filings

Form	Who files it	What it does	Timing highlights
Form 4876‑A	A domestic C corporation electing IC‑DISC status	Makes the one‑time election to be treated as an IC‑DISC under IRC section 992, with shareholder consents in Part II	First year: within 90 days after the tax year begins. Later years: in the 90‑day window before the first day of that year
Supplemental Form 4876‑A	The same corporation when shares change before the election takes effect	Reports only the new or additional shareholders and obtains their consents; marked SUPPLEMENTAL across the top	File within the first 90 days of the tax year the election takes effect
Form 1120‑IC‑DISC	A corporation that has already made the IC‑DISC election	The IC‑DISC's annual information return, filed with the same Service Center as Form 4876‑A	Filed every year the election is in effect; the election itself is not re‑filed

Citations are named in plain text throughout this article (the IRS Instructions for Form 4876-A, Rev. September 2016, and IRC sections 992, 993, and 441(h)).

A quick word on IC‑DISC, for readers who landed here for exports

If you are exploring an IC‑DISC for export incentives, Form 4876‑A is the election you need. Review the latest instructions, confirm timing, and plan your shareholder consents and signatures, remembering that all shareholders must consent for the election to be valid, since even one non‑consenting shareholder invalidates it.

Editorial note, this guide reflects IRS pages reviewed through January 31, 2026. Always check IRS.gov for the latest instructions before you file.

How Accountably fits, only when you need help

A filing like Form 4876-A turns on hard deadlines, two qualification tests, and unanimous consent, the kind of low‑volume, high‑stakes work that does not fit a one‑size template. Accountably is a U.S. accounting and tax outsourcing & offshoring services company, and we build disciplined delivery around exactly this: eligibility tests run on a schedule, consent logs mapped to each shareholder, calendared 90‑day windows, and layered review before anything is filed. That structure shortens reviews and protects your timeline, especially during peak season. We mention this because most voided elections come down to missed timing or an incomplete consent, not bad intentions.

Closing checklist you can copy

• Confirm the entity is a domestic C corporation and clears the section 992 and 993 tests before you start, since S corporations and others under section 992(d) are ineligible.
• Run the two 95% tests, qualified export receipts and qualified export assets, and confirm one class of stock with a par or stated value of at least $2,500.
• Identify the correct 90‑day window: after the year begins for a first tax year, before the year begins for any later year.
• Collect consent from 100% of shareholders in Part II or qualifying separate statements, with both spouses or each co‑tenant signing where stock is jointly held.
• File with the Service Center where the corporation files Form 1120‑IC‑DISC, never the IR‑6526 comments address, and file a SUPPLEMENTAL form within 90 days if shares change before the effective date.

With this playbook, you can file the election cleanly the first time and keep it valid. Pull the current IRS instructions before you file, since the September 2016 revision is current for 2025 but guidance can change.

Reusable Checklists

These checklists are copy-paste ready for your firm SOPs, drop them into your workpaper template and tick each item as you clear it.

Keep 4876-A Season From Stalling

Form 4876-A is low volume but unforgiving. The election turns on hard 90-day windows, unanimous shareholder consent, and two separate 95% tests, and a single slip voids the whole thing. The form itself is short, yet the IRS Paperwork Reduction Act notice on Form 4876-A still estimates about 4 hours 4 minutes of recordkeeping plus more than an hour each to learn and prepare it, almost all of it in the supporting work, not the typing.

The fix is not more hours, it is a repeatable workflow that front-loads the eligibility tests and consent collection so nothing waits on a year-end scramble.

• Run the 95% qualified export receipts and 95% qualified export assets tests on a schedule, not at filing.
• Keep a live shareholder consent log mapped to Part II lines and the column Ha and Hb share counts.
• Track first-year versus subsequent-year 90-day windows on a shared calendar so the direction never flips by accident.
• Flag any share movement between filing and the effective date for a SUPPLEMENTAL Form 4876-A within 90 days.
• Reconcile the tax year to the highest-voting-power shareholder under IRC section 441(h) before you commit.

That is the kind of structured execution we build at Accountably, documented steps, layered review, and predictable turnaround for the technical filings that do not fit a one-size template. See how our tax outsourcing services keep specialized elections like this from stalling your close.

FAQs

What is Form 4876‑A used for?

A domestic corporation files Form 4876-A to elect to be treated as an interest charge domestic international sales corporation (IC‑DISC) under IRC section 992. It is only the election form; the IC‑DISC then files its annual return on Form 1120‑IC‑DISC.

When is Form 4876‑A due?

For the corporation's first tax year, file within 90 days after the tax year begins. For any later tax year, file during the 90‑day period immediately before the first day of that tax year. The direction of the window flips between the first and subsequent years.

Do all shareholders have to consent to the IC‑DISC election?

Yes. The election is valid only if all of the corporation's shareholders as of the first day of the effective tax year consent, by signing Part II or a qualifying separate consent statement. Each consent is irrevocable and binds transferees; one non‑consenting shareholder invalidates the election.

What are the IC‑DISC qualification tests?

At least 95% of gross receipts for the tax year must be qualified export receipts, the adjusted basis of qualified export assets must be at least 95% of all assets at year‑end, the corporation must have one class of stock with a par or stated value of at least $2,500 on each day of the year, and it must keep separate books and records.

Can an S corporation elect IC‑DISC treatment on Form 4876‑A?

No. S corporations, certain financial institutions, and other corporations listed in IRC section 992(d) are not eligible. An exporter operating as an S corporation typically sets up a separate C corporation to hold the IC‑DISC election.