Closing a business involves a multi-step process, from informing employees to cancelling permits to distributing assets. But, it’s important to note that closing a business in the eyes of the IRS is a process all its own. Filing all of the required paperwork to close a business with the IRS is crucial to avoid further tax responsibilities and complications after the business closes its doors.

The forms that you’ll need to file with the IRS will depend on the type of business that you own, as well as the breadth of your assets, the number of your employees, and other important factors. Regardless of those variables, we’ve compiled a complete list of steps below to follow to close a business with the IRS.

1. Pay final federal tax deposits.

The first step involving the IRS for the dissolution of your business is paying off all federal taxes owed. If you owe the IRS more than your business can afford when it comes time to close its doors, you can contact the IRS about installment payments or reaching a compromise.

Federal taxes can be paid quickly and easily using EFTPS: The Electronic Federal Tax Payment System. It’s a convenient, secure electronic system offered free of charge by the U.S. Department of Treasury.

2. File final employment tax forms.

Final employment tax forms will inform the IRS of the total payments made by the business to employees in your last tax year or quarter of operation. You may use Form 940, Form 941, Form 943, or Form 943-A, depending on your situation and business type.

3. Provide final wage and withholding information to employees, then report information from issued W-2s with Form W-3.

This step ensures that your employees have the wage and withholding information needed to report income to the IRS. You can use Form W-2, Wage and Tax Statement, to issue wage information to employees. You can then use Form W-3 to report wage information from W-2s to the IRS.

4. File Form 8027 to disclose final tip income and allocated tips information.

Form 8027 provides tip income and allocated tip information to the IRS. This form typically only needs to be filed by large food or beverage establishments.

5. Report capital gains and losses to the IRS.

Capital gains and losses are the difference between the amount a capital asset was sold for and your basis (the original cost of the asset plus any improvements made). Businesses will often sell more capital before they close their doors – any capital gains or losses need to be reported to the IRS in the dissolution process.

Form 1120 (Schedule D) is used to report capital gains and losses by S corporations. After gains and losses are reported on Form 1120, they’ll be transferred to line 13 of Form 4040.

6. Report partner or shareholder shares of income, credits, or deductions.

In the case of a partnership, use Form 1065 (Schedule K-1) to report partner’s share of income, creditors, deductions, etc. to the IRS. If your business is a corporation or follows another business model involving shareholders, file Form 1120S (Schedule K-1) to report shareholder’s share of income, credits, deductions, etc.

7. File Form 5500, a final employee pension or benefit plan.

If your business has employees, you need to file a final employee pension or benefit plan using Form 5500. This form will provide final information on the investments, operations, and financial condition of the company’s pension or benefit plan.

8. File Form 1099-MISC to issue payment information to subcontractors, then report information with Form 1096.

If your business operates with subcontractors, use Form 1099-MISC to provide them with official payment information. Then, report information provided on issued 1099s to the IRS using Form 1096.

9. File Form 966 to report the dissolution or liquidation of a corporate entity.

If your business is considered a corporate entity, use Form 966 to report the dissolution or liquidation of the business to the IRS.

10. Report sales of business assets and report the sale or exchange or business property.

If any business assets are sold in the process of closing your business, file Form 8594, Asset Acquisition Statement. Also, if property used in your business is sold or exchanged, report it to the IRS with Form 4797.

Depending on your business, you may not be required to complete every step listed above. But, be sure to consider each one as it pertains to your business. Closing your business with the IRS will take time, but doing so is essential to closing out your business properly.