Whether by accident or intentionally, many foreign and domestic corporations do not fulfill their filing or registration requirements (i.e. by not paying the annual registration fees or filing annual reports) and have their active/good standing status removed along with many or all of the legal advantages of being a corporation. At this point, the corporation (which might have a status of “forefeited”, “suspended”, etc…) is usually best defined as having been “administratively dissolved”. Consequently, many people often assume (incorrectly) that the corporation need only file a final year corporate income tax return and no further filing requirement exist. However, while IRS instructions for forms 1120 and 1120-S note that the corporation must “file by the 15th day of the 4th month after the date it dissolved”, the IRS has clearly stated (PLR-101191-12) that the IRS does not consider a corporation to be “terminated” until it also ceases to be an “association” and it no longer does business “in a corporate manner”. Concerning the status of being an “association”, the IRS has clarified that “An organization will be treated as an association if the organization’s characteristics are such that the organization more nearly resembles a corporation than a partnership or trust” and that the major characteristics of an association are “(i) associates, (ii) an objective to carry on business and divide the gains therefrom, (iii) continuity of life, (iv) centralization of management, (v) liability for corporate debts limited to corporate property, and (vi) free transferability of interests.” In light of the above, it appears that the federal tax status of a suspended, inactive, etc… corporation would be determined on a case-by-case basis that must take into consideration the points detailed above. Although each case would need to examined separately, it generally works out that a corporation that is administratively dissolved or in bad standing will be considered to be terminated only if it ceased conducting business in a corporate manner.